Document:

ex101.htm

    
      Exhibit 10.1

      

      

      

      

      

      

      

      

      

      

      

      SECURITIES
PURCHASE AGREEMENT

      

       AMONG

      

      US
IMAGING HOLDING, LLC,

      

      CLEARWATER
RESOURCES, INC.,

      BRADENTON
RESOURCES, INC.,

      MRI-SOUTH
UMBERTON, INC.,

      MORGAN
MEDICAL CORPORATION,

      CHARLOTTE
RESOURCES, INC.,

      JACKSONVILLE
RESOURCES, INC.,

      DIAGNOSTIC
IMAGING RESOURCES, L.L.C.

      AND

      MORGAN
MEDICAL HOLDINGS, INC.

      

      

      

      

      

      

      

      Dated as
of March 11, 2009

      

       

       

       

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
 

      

      SECURITIES
PURCHASE AGREEMENT

      

      

                 SECURITIES
PURCHASE AGREEMENT, dated as of March 11, 2009 (the “Agreement”), among US
Imaging Holding, LLC, a limited liability company organized under the laws of
Nevada and a wholly owned subsidiary of Axcess Medical Imaging Corporation, a
Delaware corporation (the “Purchaser”), Diagnostic Imaging Resources, L.L.C.
(“Diagnostic Imaging”), a limited liability company organized under the laws of
Delaware, Morgan Medical Holdings, Inc., a corporation organized under the laws
of Colorado (“Morgan Medical” and, together with Diagnostic Imaging, the
“Sellers”), Clearwater Resources, Inc., a corporation organized under the laws
of Delaware (“Clearwater”), Bradenton Resources, Inc., a corporation organized
under the laws of Delaware (“Bradenton”), MRI-South Umberton, Inc., a
corporation organized under the laws of Florida (“MRI-South”), Morgan Medical
Corporation, a corporation organized under the laws of Florida (“Morgan”),
Charlotte Resources, Inc., a corporation organized under the laws of Delaware
(“Charlotte”) and Jacksonville Resources, Inc., a corporation organized under
the laws of Delaware (“Jacksonville” and together with Clearwater, Bradenton,
MRI-South, Morgan and Charlotte, the “Companies”).

      

      W I T N E S S E T
H:

       

      WHEREAS,
Diagnostic Imaging owns an aggregate of 100 shares of common stock, $.01 par
value, of Clearwater (the “Clearwater Shares”), an aggregate of 100 shares of
common stock, $.01 par value, of Bradenton (the “Bradenton Shares”), an
aggregate of 100 shares of common stock, $.01par value, of MRI-South (the
“MRI-South Shares”), an aggregate of 100 shares of common stock, $.01 par value,
of Charlotte (the “Charlotte Shares”) and an aggregate of 100 shares of common
stock, $.01par value, of Jacksonville (the “Jacksonville Shares) and Morgan
Medical owns an aggregate of 100 shares of common stock, $1.00 par value, of
Morgan (the “Morgan Shares” and, collectively with the Clearwater Shares, the
Bradenton Shares, the MRI-South Shares, the Charlotte Shares and the
Jacksonville Shares,” the “Securities”), which Securities constitute all of the
issued and outstanding shares of capital stock of the Companies;
and

       

      WHEREAS,
the Sellers desire to sell to Purchaser, and the Purchaser desires to purchase
from the Sellers, the Securities for the purchase price and upon the terms and
conditions hereinafter set forth;

       

      NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as
follows:

       

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      ARTICLE
I 

      SALE
AND PURCHASE OF SHARES

       

      1.1 Sale and
Purchase of Securities.

       

                 Upon
the terms and subject to the conditions contained herein, on the Closing Date
the Sellers shall sell, assign, transfer, convey and deliver to the Purchaser,
and the Purchaser shall purchase from the Sellers, all of the
Securities. 

       

      ARTICLE
II 

      PURCHASE
PRICE AND PAYMENT

       

      2.1 Amount of Purchase
Price. The purchase price for the Securities, shall be an amount
equal to:

       

      (a)           $200,000
(US dollars) payable to the Sellers (the “Cash Purchase Price”);
and

       

      (b)           $3,770,000
(US dollars), which will be represented by the assumption of debt incurred by
Medical Resources, Inc. on behalf of the Companies as more specifically
described on Schedule
2.1 attached hereto (the “Assumed Debt” and together with the Cash
Purchase Price, the “Purchase Price”).  In the event that the Assumed
Debt at the Closing Date is in excess of $3,770,000, then the Cash Purchase
Price shall be reduced by the amount that the Assumed Debt exceeds $3,770,000;
provided, however, in no event shall the Assumed Debt be in excess of $3,970,000
as of the Closing Date.

       

      2.2 Payment of Purchase
Price.  On the Closing Date, the Purchaser shall pay the Cash
Purchase Price to the Sellers, which shall be paid by the delivery to Sellers of
a certified or bank cashier's checks, payable to the order of the Sellers or, at
the Sellers’ option, by wire transfer of immediately available funds into an
account designated by the Sellers.  Also on the Closing Date, Medical
Resources will pay all outstanding accounts payable set forth on Schedule 4.10
(updated as of the Closing Date), and will provide proof to Purchaser of such
payments.  Purchaser and Sellers shall enter into agreements with the
parties holding the Assumed Debt acknowledging that the Companies, as
applicable, have been acquired by the Purchaser and the Companies will continue
to owe the obligation relating to the Assumed Debt (the “Assumed Debt
Agreements”).

      ARTICLE
III

      CLOSING
AND TERMINATION

       

      3.1           Closing
Date.

       

      Subject
to the satisfaction of the conditions set forth in Sections 7.1 and 7.2 hereof
(or the waiver thereof by the party entitled to waive that condition), the
closing of the sale and purchase of the Securities provided for in Section 1.1
hereof (the "Closing") shall take place at the offices of Law Offices of Stephen
M. Fleming PLLC, located at 110 Wall Street, 11th Floor,
New York, New York (or at such other place as the parties may designate in
writing) no later than April 10, 2009.  The date on which the Closing
shall be held is referred to in this Agreement as the "Closing
Date".

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      3.2   Termination of
Agreement.

       

      This
Agreement may be terminated prior to the Closing as follows:

       

      (a) At the
election of the Sellers or the Purchaser on or after May 30, 2009, if the
Closing shall not have occurred by the close of business on such date provided
that the terminating party is not in default of any of its obligations hereunder
and the Closing Date shall not have extended by the parties to a date after May
30, 2009;

       

      (b) by mutual
written consent of the Sellers and the Purchaser; or

       

      (c) by the
Sellers or the Purchaser if there shall be in effect a final nonappealable order
of a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
it being agreed that the parties hereto shall promptly appeal any adverse
determination which is not nonappealable (and pursue such appeal with reasonable
diligence).

       

      3.3   Procedure Upon
Termination.

       

      In the
event of termination and abandonment by the Purchaser or the Sellers, or both,
pursuant to Section 3.2 hereof, written notice thereof shall forthwith be given
to the other party or parties, and this Agreement shall terminate, and the
purchase of the Securities hereunder shall be abandoned, without further action
by the Purchaser or the Sellers. If this Agreement is terminated as provided
herein, each party shall redeliver all documents, work papers and other material
of any other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the
same.

       

      3.4   Effect of
Termination.

       

      In the
event that this Agreement is validly terminated as provided herein, then each of
the parties shall be relieved of their duties and obligations arising under this
Agreement after the date of such termination and such termination shall be
without liability to the Purchaser, the Companies or the Sellers. 

       

      Article
IV

      REPRESENTATIONS
AND WARRANTIES OF THE SELLERS

       

      The
Sellers and Medical Resources, Inc., a Delaware corporation and the parent
company of the Sellers (“MRI”), represent and warrant to the Purchaser
that:

       

      4.1.         Organization and Good
Standing of the Companies.  Each of the Companies is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation as set forth above. The Companies are
not required to be qualified to transact business in any other jurisdiction
where the failure to so qualify would have an adverse effect on the business of
the Companies.

       

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
 

      4.2.          Authority.

      

                 (a)           Each
of the Companies has full power and authority (corporate and otherwise) to carry
on its business and has all permits and licenses that are necessary to the
conduct of its business or to the ownership, lease or operation of its
properties and assets.

      

                 (b)           The
execution of this Agreement and the delivery hereof to the Purchaser and the
sale contemplated herein have been, or will be prior to Closing, duly authorized
by the Managing Member of Diagnostic Imaging and the Boards of Directors of
Morgan Medical and each of the Companies and by the Sellers as sole stockholders
of the Companies having full power and authority to authorize such
actions.

      

                 (c)           Subject
to any consents required under Section 4.7 below, the Sellers and the
Companies have the full legal right, power and authority to execute,
deliver and carry out the terms and provisions of this Agreement; and this
Agreement has been duly and validly executed and delivered on behalf of Sellers
and the Companies and constitutes a valid and binding obligation of the Sellers
and the Companies, enforceable in accordance with its terms.

      

                 (d)           Except
as set forth in Schedule
4.2 hereto, to the best of Sellers’ knowledge, neither the execution and
delivery of this Agreement, the consummation of the transactions herein
contemplated, nor compliance with the terms of this Agreement will violate,
conflict with, result in a breach of, or constitute a default under any statute,
regulation, indenture, mortgage, loan agreement, or other agreement or
instrument to which the Sellers or any of the Companies is a party or by which
it or any of them is bound, any charter, regulation, or bylaw provision of the
Sellers or any of the Companies, or any decree, order, or rule of any court or
governmental authority or arbitrator that is binding on the Sellers or any of
the Companies in any way.

      

      4.3.          Shares.

      

                 (a)           The
authorized capital stock of Clearwater consists of 100 shares of common stock,
par value $.01per share, of which the Clearwater Shares have been issued
to  Diagnostic Imaging and constitute the only shares of the capital
stock of Clearwater outstanding.  The authorized capital stock of
Bradenton consists of 100 shares of common stock, par value $.01 per share, of
which the Bradenton Shares have been issued to Diagnostic Imaging and constitute
the only shares of the capital stock of Bradenton outstanding.  The
authorized capital stock of MRI-South consists of 1,000 shares of common stock,
par value $.01per share, of which the MRI-South Shares have been issued to
Diagnostic Imaging  and constitute the only shares of the capital
stock of MRI-South outstanding.  The authorized capital stock of
Morgan consists of 7,500 shares of common stock, par value $1 per share, of
which the Morgan Shares have been issued to Morgan Medical and constitute the
only shares of the capital stock of Morgan outstanding.  The
authorized capital stock of Charlotte consists of 3,000 shares of common stock,
par value $.01per share, of which the Charlotte Shares have been issued to
Sellers and constitute the only shares of the capital stock of Charlotte
outstanding.  The authorized capital stock of Jacksonville consists of
1,000 shares of common stock, par value $.01per share, of which the Jacksonville
Shares have been issued to Sellers and constitute the only shares of the capital
stock of Jacksonville outstanding.  All of the Securities are duly
authorized, validly issued, fully paid and non-assessable.

       

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
 

                 (b)           The
Sellers are the lawful record and beneficial owner of all the Securities, free
and clear of any liens, pledges, encumbrances, charges, claims or restrictions
of any kind, except as set forth in Schedule 4.3 hereto, and have, or will
have on the Closing Date, the absolute, unilateral right, power, authority and
capacity to enter into and perform this Agreement without any other or further
authorization, action or proceeding, except as specified herein.

      

                 (c)           There
are no authorized or outstanding subscriptions, options, warrants, calls,
contracts, demands, commitments, convertible securities or other agreements or
arrangements of any character or nature whatever under which any of the
Companies are or may become obligated to issue, assign or transfer any shares of
capital stock of any of the Companies, except as set forth in Schedule 4.3 hereto.  Upon
the delivery to Purchaser on the Closing Date of the certificates representing
the Securities, Purchaser will have good, legal, valid, marketable and
indefeasible title to all the then issued and outstanding shares of capital
stock of the Companies, free and clear of any liens, pledges, encumbrances,
charges, agreements, options, claims or other arrangements or restrictions of
any kind (other than any such liens, pledges, encumbrances, charges, agreements,
options, claims and other arrangements and restrictions that will be terminated
and discharged promptly on Closing upon the receipt by the holders of the same
of sums sufficient to pay in full the obligations secured by such liens and
other encumbrances, which such liens are attached hereto as Schedule 4.3(c)).

      

      4.4.           Basic Corporate
Records.  The copies of the Articles of Incorporation of each
of the Companies (certified by the Secretary of State or other authorized
official of the jurisdiction of incorporation), and the Bylaws of each of the
Companies, as the case may be (certified within 30 days of the date of this
Agreement as true, correct and complete by each of the Companies’ secretary or
assistant secretary), all of which have been delivered to the Purchaser, are
true, correct and complete as of the date of this Agreement.

      

      4.5.           Minute
Books.  The minute books of each of the Companies, which shall
be exhibited to the Purchaser between the date hereof and the Closing Date, each
contain true, correct and complete minutes and records of all meetings,
proceedings and other actions of the shareholders, Boards of Directors and
committees of such Boards of Directors of each such corporation, if any, and, on
the Closing Date, will contain true, correct and complete minutes and records of
any meetings, proceedings and other actions of the shareholders, respective
Boards of Directors and committees of such Boards of Directors of each such
corporation.

      

      4.6.           Subsidiaries and
Affiliates.  Any and all businesses, entities, enterprises and
organizations in which any of the Companies has any ownership, voting or profit
and loss sharing percentage interest (the “Subsidiaries”) are identified in
Schedule 4.6 hereto, together with the
Companies’ interest therein.  Unless the context requires otherwise or
specifically designated to the contrary on Schedule 4.6 hereto, “Companies” as
used in this Agreement shall include all such Subsidiaries.  Except as
set forth on Schedule
4.6 hereto, (i)
the Companies have made no advances to, or investments in, nor owns beneficially
or of record, any securities of or other interest in, any business, entity,
enterprise or organization, (ii) there are no arrangements through which any of
the Companies has acquired from, or provided to, the Sellers or their affiliates
any goods, properties or services, (iii) there are no rights, privileges or
advantages now enjoyed by any of the Companies as a result of the ownership of
the Companies by the Sellers which, to the knowledge of the Sellers or the
Companies, might be lost as a result of the consummation of the transactions
contemplated by this Agreement.  Each entity shown on Schedule 4.6 is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has full corporate power to own all of
its property and to carry on its business as it is now being
conducted.  Also set forth on Schedule 4.6 hereto is a list
of jurisdictions in which each Subsidiary is qualified as a foreign
corporation.  Such jurisdictions are the only jurisdictions in which
the ownership or leasing of property by each Subsidiary or the conduct of its
business requires it to be so qualified.  All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable, and, except as set forth on Schedule 4.6 hereto, are owned, of
record and beneficially, by the Companies, and on the Closing Date will be owned
by the Companies, free and clear of all liens, encumbrances, equities, options
or claims whatsoever.  No Subsidiary has outstanding any other equity
securities or securities options, warrants or rights of any kind that are
convertible into equity securities of such Subsidiary, except as set forth on
Schedule 4.6 hereto.

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      
 

      4.7.           Consents.  Except
as set forth in Schedule
4.7 hereto, no
consents or approvals of any public body or authority and no consents or waivers
from other parties to leases, licenses, franchises, permits, indentures,
agreements or other instruments are (i) required for the lawful consummation of
the transactions contemplated hereby, or (ii) necessary in order that the
business can be conducted by the Purchaser in the same manner after the Closing
as heretofore conducted by the Companies, nor will the consummation of the
transactions contemplated hereby result in creating, accelerating or increasing
any liability of the Companies.

      

      4.8.           Financial
Statements.  The Sellers have delivered, or will deliver prior
to Closing, to the Purchaser copies of the following financial statements (which
include all notes and schedules attached thereto), all of which to the best of
Sellers’ knowledge,  are true, complete and correct, have been
prepared from the books and records of the Companies in accordance with
generally accepted accounting principles (“GAAP”) consistently applied and
fairly present the financial condition, assets, liabilities and results of
operations of the Companies as of the dates thereof and for the periods covered
thereby:

      

      (i)           the
unaudited combined balance sheet of each of the Companies as at December 31,
2007 and 2008, and the related unaudited statements of operations, stockholder’s
equity and of cash flows of the Companies for the years then ended (such
statements, including the related notes and schedules thereto, are referred to
herein as the “Financial Statements”).

      

                            In
such Financial Statements, the statements of operations do not contain any items
of special or nonrecurring income or any other income not earned in the ordinary
course of business except as set forth in Schedule 4.8 hereto, and the financial
statements for the interim period indicated include all adjustments, which
consist of only normal recurring accruals, necessary for such fair
presentation.  There are no facts known to any of the Sellers, the
Companies that, under generally accepted accounting principles consistently
applied, would alter the information contained in the foregoing Financial
Statements in any material way.

                            

                            For
the purposes hereof, the balance sheet of the Companies as of December 31, 2008
is referred to as the “Balance Sheet” and December 31, 2008 is referred to as
the “Balance Sheet Date”.

      

      4.9.           Records and Books of
Account. To the best of Sellers’ knowledge, the records and books of
account of the Companies reflect all material items of income and expense and
all material assets, liabilities and accruals, and have been, and to the Closing
Date will be, regularly kept and maintained in conformity with GAAP applied on a
consistent basis.  Further, all additional corporate records (i.e.
bank statements, contracts, etc.) shall be delivered to the Purchaser prior to
the Closing Date).

       

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
 

      4.10.         Absence of Undisclosed
Liabilities.  Except as disclosed in Schedule 4.10 hereto, there are no
liabilities or obligations of the Companies, whether accrued, fixed, absolute,
contingent, determined or determinable, and including without limitation (i)
liabilities to former, retired or active employees of the Companies under any
pension, health and welfare benefit plan, vacation plan or other plan of the
Companies, (ii) tax liabilities incurred in respect of or measured by income for
any period prior to the close of business on the Balance Sheet Date, or arising
out of transactions entered into, or any state of facts existing, on or prior to
said date, (iii) contingent liabilities in the nature of an endorsement,
guarantee, indemnity or warranty and (iv) accounts payable of any
nature.  In addition to the accounts payable that Medical Resources
shall pay on the Closing Date, as provided in Section 2.2, the Sellers shall
also be obligated to pay any additional accounts payable and accrued expenses,
as they become due, for items incurred prior to the Closing Date, and will pay
such obligations within 45 days of notice, either by the Companies directly or
from the Purchaser, that such obligations have come due.

      

      4.11           Taxes.

      

                 (a)           For
purposes of this Agreement, “Tax” or “Taxes” refers to:  (i) any and
all federal, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities relating to taxes, including taxes
based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes and escheatment
payments, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity; (ii) any liability for the payment of any
amounts of the type described in clause (i) as a result of being or ceasing to
be a member of an affiliated, consolidated, combined or unitary group for any
period (including, without limitation, any liability under Treas. Reg. Section
1.1502-6 or any comparable provision of foreign, state or local law); and (iii)
any liability for the payment of any amounts of the type described in clause (i)
or (ii) as a result of any express or implied obligation to indemnify any other
person or as a result of any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity.

      

                 (b)           (i)           To
the best of the Sellers’ knowledge, each of the Companies has timely filed all
federal, state, local and foreign returns, estimates, information statements and
reports (“Returns”) relating to Taxes required to be filed by such Companies
with any Tax authority. To the best of Sellers’ knowledge, all such Returns are
true, correct and complete in all material respects and each of the Companies
has paid all Taxes shown to be due on such Returns.  Except as listed
on Schedule 4.11 hereto,
none of the Companies is currently the beneficiary of any extensions of time
within which to file any Returns. The Sellers and the Companies have furnished
and made available to the Purchaser complete and accurate copies of all income
and other Tax Returns, on a pro forma basis, and any amendments thereto filed by
the Companies in the last three (3) years.

       

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
 

      
        (ii)  To the
best of the Sellers’ knowledge, MRI, as of the Closing Date, will have withheld
and accrued or paid to the proper authority all Taxes required to have been
withheld and accrued or paid on behalf of each of the
Companies.

      

      

      
        (iii)  As of the
Closing Date, there has been no delinquency in the payment of any Tax nor is
there any Tax deficiency outstanding or assessed against such
Companies.  Except as provided on Schedule 4.11, the Companies
have not executed any waiver of any statute of limitations for the assessment or
collection of any Tax.

      

      

      
        (iv)  Except as
provided on Schedule
4.11, to the best of the Sellers and MRI’s knowledge, there is no
dispute, claim, or proposed adjustment concerning any Tax liability of the
Companies either (A) claimed or raised by any Tax authority in writing and
delivered to the Companies or (B) based upon personal contact by any officer of
the Companies with any agent of such Tax authority, and to the knowledge of
Sellers and the Companies, there is no claim for assessment, deficiency, or
collection of Taxes, or proposed assessment, deficiency or collection from the
Internal Revenue Service or any other governmental authority against the
Companies which has not been satisfied.  The Companies are not a party
to nor have any Companies been notified in writing that it is the subject of any
pending, proposed, or threatened action, investigation, proceeding, audit, claim
or assessment by or before the Internal Revenue Service or any other
governmental authority. The Companies have not filed any requests for rulings
with the Internal Revenue Service.  No power of attorney has been
granted by any of the Companies or its Affiliates with respect to any matter
relating to Taxes of the Companies. To the best of Sellers’ knowledge, there are
no Tax liens of any kind upon any property or assets of the Companies, except
for inchoate liens for Taxes not yet due and payable.

      

      

      
        (v)  The
Companies have no liability for any unpaid Taxes which has not been paid or
accrued for or reserved on the Financial Statements (as defined in Section 4.8
of this Agreement) in accordance with GAAP, whether asserted or unasserted,
contingent or otherwise.

      

      

      
        (vi)  There is
no contract, agreement, plan or arrangement to which any of the Companies is a
party as of the date of this Agreement, including but not limited to the
provisions of this Agreement, covering any employee or former employee of the
Companies that, individually or collectively, would reasonably be expected to
give rise to the payment of any amount that would not be deductible pursuant to
Sections 280G, 404 or 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”). There is no contract, agreement, plan or arrangement to which any
of the Companies is a party or by which it is bound to compensate any individual
for excise taxes paid pursuant to Section 4999 of the Code.

      

      

      
        (vii)  The
Companies have not filed any consent agreement under Section 341(f) of the Code
or agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by the
Companies.

      

      

      
        (viii)  Except
for the informal tax sharing arrangement pursuant to the consolidated return
regulations, the Companies are not a party to, nor have any obligation under any
tax-sharing, tax indemnity or tax allocation agreement or
arrangement.

      

      

      
        (ix)  None of
the Companies’ assets are tax exempt use property within the meaning of Section
168(h) of the Code.

      

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
 

      4.12.      Accounts
Receivable.  The accounts receivable of the Companies shown on
the Balance Sheet Date, and those to be shown in the Financial Statements, are,
and will be, actual bona fide receivables from transactions in the ordinary
course of business representing valid and binding obligations of others for the
total dollar amount shown thereon, and as of the Balance Sheet Date were not
(and presently are not) subject to any recoupments, set-offs, or
counterclaims.  The Purchaser expressly acknowledges that all accounts
receivable, as of the Closing Date (the “Pre-Closing
A/R”), will be property of the Sellers and the Purchaser further acknowledges
that it will have no claim to the Pre-Closing A/R.  The Sellers shall
have sole responsibility for collecting Pre-Closing A/R.  The Sellers
expressly acknowledge that all accounts receivable, following the Closing Date
(the “Post-Closing A/R”), will be property of the Purchaser and the Sellers
further acknowledge that they will have no claim to the Post-Closing
A/R.  Notwithstanding anything contained in this Section 4.12 to the
contrary, the Sellers and Medical Resources shall retain control of the
lockboxes for the facilities involved in this transaction for a period of 60
days following the Closing (the “Lockbox Period”).  During the Lockbox
Period, Medical Resources and the Sellers will cooperate with the Purchaser to
ensure that Purchaser receives the Post-Closing A/R, and is able properly to
document the financial information for the ongoing businesses at those
facilities, by weekly reporting all receipts to the Purchaser, providing the
Purchaser with copies of all applicable cash logs, and forwarding to the
Purchaser any and all amounts, invoices or other materials allocated to
Purchaser that are placed in such lockboxes.  In addition, Sellers and
Medical Resources will use their best efforts to ensure that Purchaser receives
“information only” access to the lockbox accounts during the Lockbox
Period.  After the Lockbox Period, the Purchaser will cooperate with
the Sellers and Medical Resources to ensure that the Sellers and Medical
Resources continue to receive the Pre-Closing A/R, by weekly reporting all
receipts to the Sellers and Medical Resources related to the Pre-Closing A/R,
providing the Sellers and Medical Resources with copies of all applicable cash
logs related to the Pre-Closing A/R, and forwarding to Medical Resources any and
all amounts, invoices or other materials allocated to the Sellers and Medical
Resources related to the Pre-Closing A/R that are placed in such
lockboxes.  In addition, the Purchaser will use its best efforts to
ensure that the Sellers and Medical Resources receive “information only” access
to the lockbox accounts after the Lockbox Period.  At the end of the
Lockbox Period, the Sellers and Medical Resources will execute such
documentation and take such action as is necessary to transfer ownership and
possession of the lockboxes to the Purchaser.

      

      4.13.          Intentionally Left
Blank.

      

      4.14.          Machinery and
Equipment.  Except for items disposed of in the ordinary course
of business, all computers and related software, machinery, tools, furniture,
fixtures, equipment, vehicles, leasehold improvements and all other tangible
personal property (hereinafter “Fixed Assets”) of the
Companies  currently being used in the conduct of its business, or
included in determining the net book value of the Companies on the Balance Sheet
Date, together with any machinery or equipment that is leased or operated by the
Companies, are in fully serviceable working condition and
repair.  Said Fixed Assets shall be maintained in such condition from
the date hereof through the Closing Date.  Except as described on
Schedule 4.14 hereto,
all Fixed Assets owned, used or held by the Companies are situated at their
respective business premises and are currently used in its
business.  Schedule
4.14 describes all Fixed Assets owned by or an interest in which is
claimed by any other person (whether a customer, supplier or other person) for
which the Companies are responsible (copies of all agreements relating thereto
being attached to said Schedule
4.14), and all such property is in the Companies’ actual possession and
is in such condition that upon the return of such property in its present
condition to its owner, the Companies will not be liable in any amount to such
owner.  There are no outstanding requirements or recommendations by
any insurance company that has issued a policy covering either (i) such
Fixed Assets or (ii) any liabilities of the Companies  relating
to operation of the business, or by any board of fire underwriters or other body
exercising similar functions, requiring or recommending any repairs or work to
be done on any Fixed Assets or any changes in the operations of the business,
any equipment or machinery used therein, or any procedures relating to such
operations, equipment or machinery.  All Fixed Assets of the Companies
are set forth on Schedule
4.14 hereto.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
 

      4.15.          Real Property
Matters. All real property of the Companies are described in Schedule 4.15 hereto.

      

      4.16.          Leases.  All
leases of real and personal property of the Companies are described in Schedule 4.16 hereto, are in full force
and effect and: (a) constitute legal, valid and binding obligations of the
Sellers/Companies party having executed the lease and (b) have not been assigned
or encumbered.  To the knowledge of the Sellers the Companies have
performed in all material respects the obligations required to be performed by
them under all such leases to date and are not in default in any material
respect under any of said leases, except as set forth in Schedule 4.16 hereto. To the
knowledge of the Sellers and the Companies, no other party to any such lease is
in material default thereunder.  Except as noted on Schedule 4.16 hereto, none of the
leases listed thereon requires the consent of a third party in connection with
the transfer of the Securities.

      

      4.17.          Intentionally Left
Blank.

      

      4.18.          Insurance
Policies.  There is set forth in Schedule 4.18 hereto a
list and brief description of all insurance policies on the date hereof held by
the Companies or on which it pays premiums, including, without limitation, life
insurance and title insurance policies, which description includes the premiums
payable by the Companies thereunder.  Schedule 4.18 also sets forth,
in the case of any life insurance policy held by the Companies, the name of the
insured under such policy, the cash surrender value thereof and any loans
thereunder. All such insurance premiums in respect of such coverage have been,
and to the Closing Date will be, paid in full, or if not due, properly accrued
on the Balance Sheet.  All claims, if any, made against the Companies
which are covered by such policies have been, or are being, settled or defended
by the insurance companies that have issued such policies.  Up to the
Closing Date, such insurance coverage will be maintained in full force and
effect and will not be cancelled, modified or changed without the express
written consent of the Purchaser, except to the extent the maturity dates of any
such insurance policies expiring prior to the Closing Date.  No such
policy has been, or to the Closing Date will be, cancelled by the issuer
thereof, and, between the date hereof and the Closing Date, there shall be no
increase in the premiums with respect to any such insurance policy caused by any
action or omission of the Sellers or of the Companies.

      

      4.19.          Banking and Personnel
Lists.  The Sellers and the Companies will deliver to the
Purchaser prior to the Closing Date the following accurate lists and summary
descriptions relating to the Companies:

      

      (i)           The
name of each bank in which the Companies have an account or safe deposit box and
the names of all persons authorized to draw thereon or have access
thereto;

      

      (ii)           The
names, current annual salary rates and total compensation for the preceding
fiscal year of all of the present directors and officers of the Companies, and
any other employees whose current base accrual salary or annualized hourly rate
equivalent is $50,000 or more, together with a summary of the bonuses,
percentage compensation and other like benefits, if any, paid or payable to such
persons for the last full fiscal year completed, together with a schedule of
changes since that date, if any;

      

      (iii)           A
schedule of workers’ compensation payments of the Companies over the past five
full fiscal years and the fiscal year to date, a schedule of claims by employees
of the Companies against the workers’ compensation fund for any reason over such
period, identification of all compensation and medical benefits paid to date on
each such claim and the estimated amount of compensation and medical benefits to
be paid in the future on each such claim;

      

      (iv)           The
name of all pensioned employees of the Companies whose pensions are unfunded and
are not paid or payable pursuant to any formalized pension arrangements, their
agent and annual unfunded pension rates; and

      

      (v)           The
name, address, telephone number, facsimile number, email address, the name of
the principal contact and all other relevant contact information of all clients
and business relationships of the Sellers.

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
 

      4.20.          Lists of Contracts,
Etc.  There is included in Schedule 4.20 a list of the
following items (whether written or oral) relating to the Companies, which list
identifies each item:

      

      (i)           All
collective bargaining and other labor union agreements (if any); all employment
agreements with any officer, director, employee or consultant; and all employee
pension, health and welfare benefit plans, group insurance, bonus, profit
sharing, severance, vacation, hospitalization, and retirement plans,
post-retirement medical benefit plans, and any other plans, arrangements or
custom requiring payments or benefits to current or retiring
employees;

      

      (ii)           All
joint venture contracts of the Companies or affiliates relating to the
business;

      

      (iii)           All
contracts of the Companies relating to (a) obligations for borrowed money,
(b) obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) obligations to pay the deferred purchase price of property
or services, except trade accounts payable arising in the ordinary course of
business, (d) obligations under capital leases, (e) debt of others
secured by a lien on any asset of the Companies, and (f) debts of others
guaranteed by the Companies;

      

      (iv)           Intentionally
left blank;

      

      (v)           All
contracts that individually provide for aggregate future payments to or from any
of the Companies of $50,000 or more, to the extent not included in (i) through
(iv) above;

      

      (vi)           All
contracts of the Companies that have a term exceeding one year and that may not
be cancelled without any liability, penalty or premium, to the extent not
included in (i) through (v) above;

      

      (vii)         A
complete list of all outstanding powers of attorney granted by any of the
Companies; and

      

      (viii)        All
other contracts of the Companies material to the business, assets, liabilities,
financial condition, results of operations or prospects of the business taken as
a whole to the extent not included above.

      

      All of the contracts, agreements and
commitments of the Companies set forth on the first page of Schedule 4.20 and
the first three lines of the second page of Schedule 4.20 (through Naples
Radiology, P.A.) are valid, binding and in full force and effect and neither the
Companies nor any other party to the referenced contracts, agreements, or
commitments has materially breached any provision thereof or is in default
thereunder.    True and complete copies of the contracts,
leases, licenses and other documents referred to in this Schedule 4.20 will be
delivered to the Purchaser, certified by the Secretary or Assistant Secretary of
the Companies as true, correct and complete copies, not later than four weeks
from the date hereof or ten business days before the Closing Date, whichever is
sooner.

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      
 

      To the knowledge of Sellers and the
Companies, there has not been any event, happening, threat or fact that would
lead them to believe that any of said customers or vendors will terminate or
materially alter their business relationship with the Companies after completion
of the transactions contemplated by this Agreement.

      

      4.21.          Compliance With the
Law.  To the best of the Sellers’ knowledge, the Companies are
not in violation of any applicable federal, state, local or foreign law,
regulation or order or any other, decree or requirement of any governmental,
regulatory or administrative agency or authority or court or other tribunal
(including, but not limited to, any law, regulation order or requirement
relating to securities, properties, business, products, manufacturing processes,
advertising, sales or employment practices, terms and conditions of employment,
occupational safety, health and welfare, conditions of occupied premises,
product safety and liability, civil rights, or environmental protection,
including, but not limited to, those related to waste management, air pollution
control, waste water treatment or noise abatement).  Except as set
forth in Schedule 4.21 hereto, the Companies
have not been and are not now charged with, or to the knowledge of the Sellers
or the Companies under investigation with respect to, any violation of any
applicable law, regulation, order or requirement relating to any of the
foregoing, nor, to the knowledge of Sellers or the Companies after due inquiry,
are there any circumstances that would or might give rise to any such violation.
The Companies have filed all reports required to be filed by the Companies with
any governmental, regulatory or administrative agency or authority.

      

      4.22.          Litigation; Pending Labor
Disputes.  Except as specifically identified on Schedule 4.22
hereto:

      

      (i)           There
are no legal, administrative, arbitration or other proceedings or governmental
investigations pending or, to the knowledge of Sellers or the Companies,
threatened, against the Sellers or the Companies, relating to the business or
the Companies or their respective properties (including leased property), or the
transactions contemplated by this Agreement, nor is there any basis known to the
Sellers or the Companies for any such action.

      

      (ii)           There
are no known judgments, decrees or orders of any court, or any governmental
department, commission, board, agency or instrumentality binding upon Sellers or
the Companies relating to the business or the Companies the effect of which is
to prohibit any business practice or the acquisition of any property or the
conduct of any business by the Companies or which limit or control or otherwise
adversely affect the Companies’ method or manner of doing business.

      

      (iii)           No
work stoppage has occurred and is continuing or, to the knowledge of Sellers or
the Companies, is threatened affecting the business, and no representation
question involving recognition of a collective bargaining agent exists in
respect of any employees of the Companies.

      

      (iv)           There
are no pending labor negotiations or union organization efforts relating to
employees of the Companies.

       

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
 

      (v)           There
are no known charges of discrimination (relating to sex, age, race, national
origin, handicap or veteran status) or unfair labor practices pending or, to the
knowledge of the Sellers or the Companies, threatened before any governmental or
regulatory agency or authority or any court relating to employees of the
Companies.

      

      4.23.           Absence of Certain Changes
or Events.  Outside the normal course of business, the
Companies have not, since the Balance Sheet Date, except as described on Schedule 4.23
hereto:

      

      (i)           Incurred
any material obligation or, to the best of the Sellers’ knowledge, liability
(absolute, accrued, contingent or otherwise) and any obligation or, to the best
of the Sellers’ knowledge, liability incurred by the Companies in the ordinary
course is not materially adverse, except for claims, if any, that are adequately
covered by insurance;

      

      (ii)           Discharged
or satisfied any lien or encumbrance, or paid or satisfied any obligations or
liability (absolute, accrued, contingent or otherwise) other than (a)
liabilities shown or reflected on the Balance Sheet, and (b) liabilities
incurred since the Balance Sheet Date in the ordinary course of business that
were not materially adverse;

      

      (iii)           Increased
or established any reserve or accrual for taxes or other liability on its books
or otherwise provided therefor, except (a) as disclosed on the Balance Sheet, or
(b) as may have been required under generally accepted accounting principles due
to income earned or expense accrued since the Balance Sheet Date and as
disclosed to the Purchaser in writing;

      

      (iv)           Mortgaged,
pledged or subjected to any lien, charge or other encumbrance any of its assets,
tangible or intangible;

      

      (v)           Sold
or transferred any of its assets or cancelled any debts or claims or waived any
rights, except in the ordinary course of business and which sale or transfer has
not been materially adverse;

      

      (vi)           Disposed
of or permitted to lapse any patents or trademarks or any patent or trademark
applications material to the operation of its business;

      

      (vii)                      Incurred
any significant labor trouble or granted any general or uniform increase in
salary or wages payable or to become payable by it to any director, officer,
employee or agent, or by means of any bonus or pension plan, contract or other
commitment increased the compensation of any director, officer, employee or
agent;

      

      (viii)                      Authorized
any capital expenditure for real estate or leasehold improvements in excess of
$5,000.00 in the aggregate or for equipment in excess of $50,000 in the
aggregate;

      

      (ix)           Except
for this Agreement, entered into any material transaction;

       

       

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      
 

      (x)           Issued
any stocks, bonds, or other corporate securities, or made any declaration or
payment of any dividend or any distribution in respect of its capital stock;
or

      

      (xi)           Experienced
damage, destruction or loss (whether or not covered by insurance) individually
or in the aggregate materially and adversely affecting any of its properties,
assets or business, or experienced any other material adverse change or changes
individually or in the aggregate affecting its financial condition, assets,
liabilities or business.

      

      4.24.          Employee Benefit
Plans.

      

                 (a)           Schedule 4.24 lists a
description of the only Employee Programs (as defined below) that have been
maintained (as such term is further defined below) by the Companies at any time
during the five (5) years prior to the date hereof.

      

                 (b)           There
has not been any known material failure of any party to comply with any laws
applicable with respect to any Employee Program that has been maintained by any
of the Companies.  With respect to any Employee Programs now or
heretofore maintained by the Companies, the Companies, there has occurred no
known material breach of any duty under the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) or other applicable law which could result,
directly or indirectly in any taxes, penalties or other liability to the
Purchaser, the Companies or any affiliate (as defined below). To the best of
Sellers’ knowledge, no litigation, arbitration, or governmental administrative
proceeding (or investigation) or other proceeding (other than those relating to
routine claims for benefits) is pending or, to the knowledge of the Companies or
Sellers, threatened with respect to any such Employee Program.

      

                 (c)           Except
as set forth in Schedule
4.24 attached hereto, neither the Companies nor any affiliate has ever
(i) provided health care or any other non-pension benefits to any employees
after their employment was terminated (other than as required by Part 6 of
Subtitle B of Title I of ERISA) or has ever promised to provide such
post-termination benefits or (ii) maintained an Employee Program provided to
such employees subject to Title IV of ERISA, Section 401(a) or Section 412 of
Code, including, without limitation, any Multiemployer Plan.

       

      (d)           For
purposes of this Section 4.24:

       

      (i)           “Employee
Program” means (A) all employee benefit plans within the meaning of ERISA
Section 3(3), including, but not limited to, multiple employer welfare
arrangements (within the meaning of ERISA Section 3(40)), plans to which more
than one unaffiliated employer contributes and employee benefit plans (such as
foreign or excess benefit plans) which are not subject to ERISA; and (B) all
stock option plans, bonus or incentive award plans, severance pay policies or
agreements, deferred compensation agreements, supplemental income arrangements,
vacation plans, and all other employee benefit plans, agreements, and
arrangements not described in (A) above.  In the case of an Employee
Program funded through an organization described in Code Section 501(c)(9), each
reference to such Employee Program shall include a reference to such
organization;

      

      (ii)           An
entity “maintains” an Employee Program if such entity sponsors, contributes to,
or provides (or has promised to provide) benefits under such Employee Program,
or has any obligation (by agreement or under applicable law) to contribute to or
provide benefits under such Employee Program, or if such Employee Program
provides benefits to or otherwise covers employees of such entity (or their
spouses, dependents, or beneficiaries);

       

       

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      
 

      (iii)           An
entity is an “affiliate” of a Companies for purposes of this Section 3.24 if it
would have ever been considered a single employer with the Companies under ERISA
Section 4001(b) or part of the same “controlled group” as the Companies for
purposes of ERISA Section 302(d)(8)(C); and

      

      (iv)           “Multiemployer
Plan” means a (pension or non-pension) employee benefit plan to which more than
one employer contributes and which is maintained pursuant to one or more
collective bargaining agreements.

      

      4.25.          Product Warranties and
Product Liabilities.  The product warranties and return
policies of the Companies in effect on the date hereof and the types of products
to which they apply are described on Schedule 4.25
hereto.  Schedule
4.25 hereto also sets forth all product liability claims involving
amounts in controversy in excess of $50,000 that are currently either pending
or, to the best of the Sellers’ and the Companies’ knowledge, threatened against
the Companies.  The Companies have not paid in the aggregate, or
allowed as credits against purchases, or received claims for more than one
percent (1%) per year of gross sales, as determined in accordance with GAAP
consistently applied, during the past three years pursuant to obligations under
any warranty or any product liability claim with respect to goods manufactured,
assembled or furnished by the Companies.  To the knowledge of the
Sellers or the Companies, the future cost of performing all such obligations and
paying all such product liability claims with respect to goods manufactured,
assembled or furnished prior to the Closing Date will not exceed the average
annual cost thereof for said past three year period. 

      

      4.26.          Intentionally Left
Blank.

      

      4.27.          Absence of Certain
Commercial Practices.  Except as described on Schedule 4.27 hereto, neither the
Companies nor the Sellers has made any payment (directly or by secret
commissions, discounts, compensation or other payments) or given any gifts to
another business concern, to an agent or employee of another business concern or
of any governmental entity (domestic or foreign) or to a political party or
candidate for political office (domestic or foreign), to obtain or retain
business for the Companies or to receive favorable or preferential treatment,
except for gifts and entertainment given to representatives of customers or
potential customers of sufficiently limited value and in a form (other than
cash) that would not be construed as a bribe or payoff.

      

      4.28.          Licenses, Permits, Consents
and Approvals.  The Companies have, and at the Closing Date
will have, all licenses, permits or other authorizations of governmental,
regulatory or administrative agencies or authorities (collectively, “Licenses”)
required to conduct the business of the Companies. All Licenses of the Companies
are listed on Schedule
4.28 hereto.  At the Closing, the Companies will have all such
Licenses which are material to the conduct of the Business and will have renewed
all Licenses which would have expired in the interim.  Except as
listed in Schedule 4.28 hereto, no registration,
filing, application, notice, transfer, consent, approval, order, qualification,
waiver or other action of any kind (collectively, a “Filing”) will be required
as a result of the sale of the Securities by Sellers in accordance with this
Agreement (a) to avoid the loss of any License or the violation, breach or
termination of, or any default under, or the creation of any lien on any asset
of the Companies pursuant to the terms of, any law, regulation, order or other
requirement or any contract binding upon the Companies or to which any such
asset may be subject, or (b) to enable Purchaser (directly or through any
designee) to continue the operation of the Companies and the business
substantially as conducted prior to the Closing Date.  All such
Filings will be duly filed, given, obtained or taken on or prior to the Closing
Date and will be in full force and effect on the Closing Date.

       

       

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      
 

      4.29.          Environmental
Matters. Except as set forth on Schedule 4.29
hereto:

       

      (a) The
operations of the Companies are in material compliance with all applicable Laws
promulgated by any governmental entity which prohibit, regulate or control any
hazardous material or any hazardous material activity (“Environmental Laws”) and
the Companies have all permits issued pursuant to Environmental Laws or
otherwise except for where noncompliance or the absence of such permits would
not, individually or in the aggregate, have a Material Adverse
Effect;

       

      (b) The
Companies have obtained all permits required under all applicable Environmental
Laws necessary to operate the Business;

       

      (c) The
Companies are not the subject of any outstanding written order or Contract with
any governmental authority or person respecting Environmental Laws;

       

      (d)          The
Companies have not received any written communication alleging either or both
that the Companies may be in violation of any Environmental Law, or any permit
issued pursuant to Environmental Law;

      

      (e)           There
is no material or substance that has been designated by any governmental entity
or applicable federal, state or municipal law to be radioactive, toxic,
hazardous, carcinogenic, mutagenic, or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde, trichloroethylene, other aromatic and/or halogenated
hydrocarbons, pesticides, defoliants, lead, chromium, radon gas or other
radioactive substances, and all substances listed as hazardous materials (the
“Hazardous Materials”) pursuant to any applicable law located on or in any of
the properties or assets owned, leased, occupied or otherwise used by the
Companies in violation of Environmental Laws, and no willful release of any
Hazardous Materials or any known violation of any Environmental Laws has
occurred on or from the properties and assets of the Companies. To the best of
Sellers’ knowledge, the Companies have not used any of its properties or assets
to produce, generate, store, handle, transport or dispose of any Hazardous
Materials in violation of the Environmental Laws and none of the real properties
or leased premises has been or is being used as a landfill or waste disposal
site.  There are no underground or surface storage tanks located on or
in any of the properties or assets owned, leased, occupied or otherwise used by
the Companies knowingly in breach of the Environmental Laws.

      

      4.30           Broker.  Other
than the payment of a fee to Dresner Partners, which is the sole responsibility
of the Sellers, neither the Companies nor the Sellers has retained any broker in
connection with any transaction contemplated by this
Agreement.  Purchaser and the Companies shall not be obligated to pay
any fee or commission associated with the retention or engagement by the
Companies or Sellers of any broker in connection with any transaction
contemplated by this Agreement.

       

       

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      
 

      4.31.          Related Party
Transactions.  Except as described in Schedule 4.31 hereto, all transactions
during the past five years between the Companies and any current or former
shareholder or any entity in which the Companies or any current or former
shareholder had or has a direct or indirect interest have been fair to the
Companies as determined by the Board of Directors.  No portion of the
sales or other ongoing business relationships of the Companies is dependent upon
the friendship or the personal relationships (other than those customary within
business generally) of the Sellers, except as described in Schedule 4.31 hereto.  During
the past five years, the Companies have not forgiven or cancelled, without
receiving full consideration, any indebtedness owing to them by the
Sellers.

      

      4.32           Patriot Act. The
Companies and the Sellers certify that neither the Companies nor any of their
Subsidiaries has been designated, and is not owned or controlled, by a
“suspected terrorist” as defined in Executive Order 13224.  The
Companies and the Sellers hereby acknowledge that the Purchaser seeks to comply
with all applicable laws concerning money laundering and related
activities.  In furtherance of those efforts, the Companies and the
Sellers hereby represent, warrant and agree that:  (i) none of the
cash or property that the Sellers has contributed or paid or will contribute and
pay to the Companies has been or shall be derived from, or related to, any
activity that is deemed criminal under United States law; and (ii) no
contribution or payment by the Companies or any of their Subsidiaries to the
Purchaser, to the extent that they are within the Companies’ and/or their
Subsidiaries’ control shall cause the Purchaser to be in violation of the United
States Bank Secrecy Act, the United States International Money Laundering
Control Act of 1986 or the United States International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001.  The Sellers shall
promptly notify the Purchaser if any of these representations ceases to be true
and accurate regarding the Sellers, the Companies or any of their
Subsidiaries.  The Sellers agree to provide the Purchaser any
additional information regarding the Companies or any of the Subsidiaries that
the Purchaser reasonably requests to ensure compliance with all applicable laws
concerning money laundering and similar activities.

      

      4.33           Governmental Program
Participation; Regulatory Issues.

      

      (a)           The
Companies are eligible to receive payment without restriction under Title XVIII
of the Social Security Act (“Medicare”), and Title XIX of the Social Security
Act ("Medicaid"), and as a provider with a valid and current provider agreement
and a valid provider number with the federal Medicare Program and the Medicaid
Program (the “Government Programs”), through authorized
intermediaries.  The Companies are in compliance with the conditions
of participation for the Government Programs in all material
respects.  There are not pending or, to the best knowledge of the
Companies, threatened any complaint, medical review, audit, overpayment,
proceeding or investigation under the Government Programs involving the
Companies.  The Companies’ diagnostic imaging centers are in
compliance with all Medicare statutes, rules and conditions of participation,
including but limited to the federal Anti-Kickback Statute, 42 U.S.C.
§1320a-7b(b), the federal Stark Law, 42 U.S.C. § 1395nn, and the regulations
applicable to independent diagnostic testing facilities, and there are no
outstanding statement or deficiencies of plans of correction that have not been
accepted by or on behalf of Medicare.  The Companies' diagnostic
imaging centers are in compliance with all applicable state statutes, rules and
regulations, including but not limited to the Patient Self-Referral Act,
§456-053, Fla. Stat. and the Patient Brokering Act, §817.505, Fla.
Stat.

      

      (b)           The
Companies have filed and caused to be filed all material reports that are
required to have been filed or made with respect to the payment for the
Companies’ services by third party payors, including Government Programs and
other insurance carriers.  The Companies have maintained all records
required of it under law.

      

      (c)           Neither
any current or former employee of the Companies or any affiliate of the
Companies has been excluded from participating in any federal health care
program (as defined in 42 U.S.C. §1320a-7b(f)), and (ii) none of the Companies’
current officers, managers or directors (or holders of equivalent positions)
have been excluded from Medicare or any federal health care program (as defined
in 42 U.S.C. §1320a-7b(f)) or been subject to sanction pursuant to 42 U.S.C.
§1320a-7a or 1320a-8, or been convicted of a crime described at 42
U.S.C.  §1320a-7b.

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      
 

      (d)           To
the Companies’ knowledge, there is no action or event that will cause a material
decrease in the number of patients served by the Companies diagnostic imaging
centers after the Closing Date.

      

      (e)           To
the Companies’ knowledge, there exists no event, condition or other
circumstances which, immediately or with a lapse of time, would materially
adversely affect the Companies business, would constitute a violation of the
conditions of participation in federal or state programs, or would be a
violation of any statute or regulation concerning operation of such
business.

      

      (f)           The
Companies have all permits and licenses that are necessary to enable them to own
and to carry on the diagnostic imaging business as presently conducted and to
receive private and government payment for furnishing imaging
services.  Schedule
4.28 lists all of the permits, licenses, provider numbers and
governmental contracts held by the Companies relating to their respective
businesses.  The permits, licenses, provider numbers and governmental
contracts listed on Schedule
4.28  are valid and in full force and effect, and no violations
of any such permits, licenses, provider numbers or governmental contracts have
occurred or, to the best knowledge of the Companies, have been threatened or
alleged to have occurred.  Furthermore, no actions or proceedings are
pending or, to the best knowledge of the Sellers, threatened, that would have
the effect of terminating, revoking, limiting, suspending, restricting,
impairing or otherwise affecting the use or renewal of any of the permits,
licenses, provider numbers or governmental contracts.

      

      (g)           Except
as set forth in Schedule 4.28 hereto, no consent, approval, waiver or
authorization from any third party  is necessary or required in
connection with the transaction contemplated hereby or for the Companies to
continue operation as an outpatient imaging facility following the
Closing.

      

      (h)           The
Companies have not been notified of any injury or harm to a patient, allegedly
caused by an act or omission of the Companies.

       

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      
 

      (i)           The
Companies have not submitted any false or fraudulent claim to any third party,
nor have the Companies received any notice from any third party regarding any
allegation of a false claim or fraud.  All billing practices of the
Companies are in compliance with all applicable federal and state laws and
regulations, and the Companies have not billed for or received any payment or
reimbursement in excess of amounts permitted by applicable federal and state
laws and regulations, except as corrected in the normal course of business. The
Companies have maintained all records required by law or
regulation.  The Companies have not solicited, received, paid or
offered to pay any remuneration, directly or indirectly, overtly or covertly, in
cash or in kind, for the purpose of making or receiving any referral which
violated any applicable anti-kickback law (including without limitation 42
U.S.C. § 1320a-7b(b)).  The Companies have complied with all
applicable security and privacy standards regarding protected health information
under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)
and all applicable state privacy laws with respect to the business.

      

      (j)           In
connection with the Companies' business, the Companies have complied with all of
the laws, rules and regulations of the Medicare programs and other governmental
health care programs, and has filed all claims, invoices, returns and other
forms in the manner prescribed.  All claims, invoices, returns and
other forms made or submitted by the Companies to Medicare or any other
governmental health or welfare related entity since the inception of the
Companies are true, complete, correct and accurate.  No deficiency in
any such claims, returns and other filings, including claims for overpayments or
deficiencies for late filings, has been asserted or threatened by any federal or
state agency or instrumentality or other provider reimbursement entities
relating to Medicare claims.  The Companies have not been subject to
audit relating to fraudulent Medicare procedures or practices.  There
is no basis for any claim or request for recoupment or reimbursement from the
Companies by any federal or state agency or instrumentality or other provider
reimbursement entities relating to Medicare or Medicaid claims in connection
with the business.

      

      4.34.                      Disclosure.  All
statements contained in any schedule, certificate, opinion, instrument, or other
document delivered by or on behalf of the Sellers or the Companies pursuant
hereto or in connection with the transactions contemplated hereby shall be
deemed representations and warranties by the Sellers and the Companies
herein.  No statement, representation or warranty by the Sellers or
the Companies in this Agreement or in any schedule, certificate, opinion,
instrument, or other document furnished or to be furnished to the Purchaser
pursuant hereto or in connection with the transactions contemplated hereby
contains or will contain any known untrue statement of a material fact or omits
or will omit to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading or necessary in order to
provide a prospective purchaser of the business of the Companies with full and
fair disclosure concerning the Companies and the Companies’
affairs.

       

       

       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      
 

      ARTICLE
V

      REPRESENTATIONS
AND WARRANTIES OF PURCHASER

       

      5.1            
Organization and Good
Standing.

       

      The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and has, and will have following the
Closing, all material licenses, permits, authorizations and the power and
authority to own and lease its assets and properties and to conduct its
business.  The Purchaser and its subsidiaries (“Purchaser’s
Subsidiaries”) are, and will be following the Closing, duly qualified or
licensed to do business and is in good standing as a foreign corporation under
the laws of the jurisdictions in which the conduct of their business or the
ownership or leasing of their assets and properties requires such
qualification.  Unless the context requires otherwise or specifically
designated on Schedule 5.1 hereto, “Purchaser” as used in this Agreement shall
include all of Purchaser’s Subsidiaries.

       

      5.2            
Authority;
Enforceability.

       

                 The
Purchaser has full legal right,  power and authority to execute,
deliver and perform this Agreement and the Assumed Debt Agreements and to
consummate the transactions contemplated hereby and thereby.  The
execution, delivery and performance of this Agreement and the Assumed Debt
Agreements by the Purchaser have been duly authorized by all necessary corporate
action on the part of the Purchaser.  This Agreement and the Assumed
Debt Agreements have been duly executed and delivered by the Purchaser and
constitute (or when executed and delivered will constitute) legal, valid and
binding obligations of the Purchaser, enforceable against the Purchaser in
accordance with their respective terms.

      

      5.3          
 Conflicts;
Consents of Third Parties.

       

      (a)           The
authorization, execution, delivery and performance by the Purchaser of this
Agreement and the Assumed Debt Agreements and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate or
conflict with any provision of the Purchaser’s charter or bylaws; (ii) violate,
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under, give rise to a right of termination,
amendment or cancellation of, accelerate the performance required by, or result
in any payment under, any contract, instrument or other writing of any nature
whatsoever to or by which the Purchaser is a party or is bound, or by which any
of its properties or assets is subject; or (iii) violate, conflict with or
result in a breach of any law, rule, regulation or other legal requirement
applicable to the Purchaser.

      

      (b)           No
consent, waiver, approval, order, permit or authorization of, or declaration or
filing with, or notification to, any person or governmental body is required on
the part of the Purchaser in connection with the execution and delivery of this
Agreement or the Assumed Debt Agreements or the compliance by Purchaser with any
of the provisions hereof or thereof.

       

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

       

      5.4           Litigation.

       

      There is
no action, suit, proceeding (including, without limitation, all arbitrations and
alternative dispute resolution proceedings) or governmental investigation of or
pending or, to the knowledge of the Purchaser, threatened against the Purchaser
which relates to the transactions contemplated by this Agreement, nor does the
Purchaser have any knowledge of any reasonably likely basis or set of
circumstances for any such action, suit, proceeding, claim or investigation, the
result of which could materially and adversely affect the Purchaser or the
transactions contemplated hereby or could impair the ability of the Purchaser to
consummate the transactions contemplated hereby.

       

      5.5           Investment
Intention.

       

      The
Purchaser is acquiring the Securities for its own account, for investment
purposes only and not with a view to the distribution (as such term is used in
Section 2(11) of the Securities Act of 1933, as amended (the "Securities Act")
thereof.  Purchaser understands that the Securities have not been
registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.

       

      5.6           Broker.

       

      The
Purchaser has not retained any broker in connection with any transaction
contemplated by this Agreement.  The Sellers shall not be obligated to
pay any fee or commission associated with the retention or engagement by the
Purchaser of any broker in connection with any transaction contemplated by this
Agreement.

       

      

      5.7           Patriot
Act.  Purchaser certifies that it has not been designated, and
is not owned or controlled, by a “suspected terrorist” as defined in Executive
Order 13224.  Purchaser hereby acknowledges that the Sellers seek to
comply with all applicable laws concerning money laundering and related
activities.  In furtherance of those efforts, Purchaser hereby
represents, warrants and agrees that:  (i) none of the cash or
property that the Purchaser has contributed or paid or will contribute and pay
to Sellers or to the holders of the Assumed Debt has been or shall be derived
from, or related to, any activity that is deemed criminal under United States
law; and (ii) no contribution or payment by the Purchaser or any of its
subsidiaries (including, after the Closing, the Companies) to the Sellers or to
the holders of the Assumed Debt shall cause the Sellers to be in violation of
the United States Bank Secrecy Act, the United States International Money
Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001.  The
Purchaser shall promptly notify the Sellers if any of these representations
ceases to be true and accurate regarding the Purchaser.  The Purchaser
agrees to provide the Sellers any additional information regarding the Purchaser
or any of its subsidiaries (including, after the Closing, the Companies) that
the Sellers reasonably request to ensure compliance with all applicable laws
concerning money laundering and similar activities.

       

       

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      
 

      5.8           Governmental Program
Participation; Regulatory Issues.

       

      (a)           Purchaser
is eligible to receive payment without restriction under Medicare and Medicaid,
and as a provider with a valid and current provider agreement and a valid
provider number with the Government Programs, through authorized
intermediaries.  Purchaser is in compliance with the conditions of
participation for the Government Programs in all material
respects.  There are not pending or, to the best knowledge of the
Purchaser, threatened any complaint, medical review, audit, overpayment,
proceeding or investigation under the Government Programs involving
Purchaser.

       

      (b)           Purchaser
has filed and caused to be filed all material reports that are required to have
been filed or made with respect to the payment for Purchaser’s services by third
party payors, including Government Programs and other insurance
carriers.  Purchaser has maintained all records required of it under
law.

      

      (c)           Neither
any current or former employee of Purchaser or any affiliate of Purchaser has
been excluded from participating in any federal health care program (as defined
in 42 U.S.C. §1320a-7b(f)), and (ii) none of the Purchaser’s current officers,
managers or directors (or holders of equivalent positions) have been excluded
from Medicare or any federal health care program (as defined in 42 U.S.C.
§1320a-7b(f)) or been subject to sanction pursuant to 42 U.S.C. §1320a-7a or
1320a-8, or been convicted of a crime described at 42
U.S.C.  §1320a-7b.

      

      (d)           There
exists no event, condition or other circumstances which, immediately or with a
lapse of time, would materially adversely affect the Purchaser’s business, would
constitute a violation of the conditions of participation in federal or state
programs, or would be a violation of any statute or regulation concerning
operation of such business.

       

      (e)           By
the Closing, Purchaser will have all permits and licenses that are necessary to
enable it to own and to carry on the diagnostic imaging business as presently
conducted and to receive private and government payment for furnishing imaging
services.

      

      (f)           By
the Closing, Purchaser will have all consents, approvals, waivers or
authorization from any third party necessary or required in connection with the
transaction contemplated hereby or for the Purchaser to continue operating the
Companies as outpatient imaging facilities following the Closing.

      

      (g)           The
Purchaser has not submitted any false or fraudulent claim to any third party,
nor has the Purchaser received any notice from any third party regarding any
allegation of a false claim or fraud.  All billing practices of the
Purchaser are in compliance with all applicable federal and state laws and
regulations, and the Purchaser has not billed for or received any payment or
reimbursement in excess of amounts permitted by applicable federal and state
laws and regulations. The Purchaser has maintained all records required by law
or regulation.  The Purchaser has not solicited, received, paid or
offered to pay any remuneration, directly or indirectly, overtly or covertly, in
cash or in kind, for the purpose of making or receiving any referral which
violated any applicable anti-kickback law (including without limitation 42
U.S.C. § 1320a-7b(b)).  The Purchaser has complied with all applicable
security and privacy standards regarding protected health information under the
HIPAA and all applicable state privacy laws with respect to the
business.

       

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

       

      (h)           In
connection with the Purchaser's business, the Purchaser has complied with all of
the laws, rules and regulations of the Medicare programs and other governmental
health care programs, and has filed all claims, invoices, returns and other
forms in the manner prescribed.  All claims, invoices, returns and
other forms made or submitted by the Purchaser to Medicare or any other
governmental health or welfare related entity since the inception of the
Purchaser are true, complete, correct and accurate.  No deficiency in
any such claims, returns and other filings, including claims for overpayments or
deficiencies for late filings, has been asserted or threatened by any federal or
state agency or instrumentality or other provider reimbursement entities
relating to Medicare claims.  The Purchaser has not been subject to
audit relating to fraudulent Medicare procedures or practices.  There
is no basis for any claim or request for recoupment or reimbursement from the
Purchaser by any federal or state agency or instrumentality or other provider
reimbursement entities relating to Medicare or Medicaid claims in connection
with the business.

      

      5.9.          Disclosure.  All
statements contained in any schedule, certificate, opinion, instrument, or other
document delivered by or on behalf of the Purchaser pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed
representations and warranties by the Purchaser herein.  No statement,
representation or warranty by the Purchaser in this Agreement or in any
agreement, schedule, certificate, opinion, instrument, or other document
furnished or to be furnished to the Purchaser pursuant hereto or in connection
with the transactions contemplated hereby contains or will contain any known
untrue statement of a material fact or omits or will omit to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading or necessary in order to provide a prospective purchaser
of the business of the Purchaser with full and fair disclosure concerning the
Purchaser and the Purchaser’s affairs.

       

      

      ARTICLE
VI

      COVENANTS

       

      6.1           Access to
Information.

       

      The
Sellers and the Companies agree that, prior to the Closing Date, the Purchaser
shall be entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants), to make
such investigation of the properties, businesses and operations of the Companies
and the Subsidiaries and such examination of the books, records and financial
condition of the Companies and the Subsidiaries as it reasonably requests and to
make extracts and copies of such books and records.  Any such
investigation and examination shall be conducted during regular business hours
and under reasonable circumstances, and the Sellers shall cooperate, and shall
cause the Companies and the Subsidiaries to cooperate, fully
therein.  No investigation by the Purchaser prior to or after the date
of this Agreement shall diminish or obviate any of the representations,
warranties, covenants or agreements of the Sellers contained in this Agreement
or the Employment Agreement.  In order that the Purchaser may have
full opportunity to make such physical, business, accounting and legal review,
examination or investigation as it may reasonably request of the affairs of the
Companies and the Subsidiaries, the Sellers shall cause the officers, employees,
consultants, agents, accountants, attorneys and other representatives of the
Companies and the Subsidiaries to cooperate fully with such representatives in
connection with such review and examination.

       

       

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      6.2           Conduct of the Business
Pending the Closing.

       

      (a)           Except
as otherwise expressly contemplated by this Agreement or with the prior written
consent of the Purchaser, not to be unreasonably withheld or delayed, the
Sellers shall, and shall cause the Companies to:

       

      (i) Conduct
the respective businesses of the Companies only in the ordinary course
consistent with past practice;

       

      (ii) Use their
best efforts to (A) preserve their respective present business operations,
organization (including, without limitation, management and the sales force) and
goodwill of the Companies and (B) preserve their present relationship with
Persons having business dealings with the Companies;

       

      (iii) Maintain
(A) all of the assets and properties of the Companies in their current
condition, ordinary wear and tear excepted and (B) insurance upon all of the
properties and assets of the Companies in such amounts and of such kinds
comparable to that in effect on the date of this Agreement;

       

      (iv) (A)
maintain the books, accounts and records of the Companies  in the
ordinary course of business consistent with past practices, (B) continue to
collect accounts receivable and pay accounts payable utilizing normal procedures
and without discounting or accelerating payment of such accounts, and (C) comply
with all contractual and other obligations applicable to the operation of the
Companies; and

       

      (v) Comply in
all material respects with applicable Laws.

       

      (b)           Except
as otherwise expressly contemplated by this Agreement or with the prior written
consent of the Purchaser, which shall not be unreasonably withheld or delayed,
the Sellers shall not, and shall cause the Companies not to:

       

      (i)           Except
for payments in the ordinary course consistent with past practice, declare, set
aside, make or pay any dividend or other distribution in respect of the capital
stock of the Companies or repurchase, redeem or otherwise acquire any
outstanding shares of the capital stock or other securities of, or other
ownership interests in, the Companies;

       

      (ii)          Transfer,
issue, sell or dispose of any shares of capital stock or other securities of the
Companies or grant options, warrants, calls or other rights to purchase or
otherwise acquire shares of the capital stock or other securities of the
Companies;

       

      (iii)         Effect
any recapitalization, reclassification, stock split or like change in the
capitalization of the Companies;

       

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

       

      (iv)         Amend
the certificate of incorporation or by-laws of the Companies;

       

      (v)          (A)           materially
increase the annual level of compensation of any employee of the Companies, (B)
increase the annual level of compensation payable or to become payable by the
Companies to any of its executive officers, (C) grant any unusual or
extraordinary bonus, benefit or other direct or indirect compensation to any
employee, director or consultant, (D) increase the coverage or benefits
available under any (or create any new) severance pay, termination pay, vacation
pay, company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, pension or other
employee benefit plan or arrangement made to, for, or with any of the directors,
officers, employees, agents or representatives of the Companies or otherwise
modify or amend or terminate any such plan or arrangement or (E) enter into any
employment, deferred compensation, severance, consulting, non-competition or
similar agreement (or amend any such agreement) to which the Companies is a
party or involving a director, officer or employee of the Companies in his or
her capacity as a director, officer or employee of the Companies;

       

      (vi) Except
for trade payables and for indebtedness for borrowed money incurred in the
ordinary course of business and consistent with past practice, borrow monies for
any reason or draw down on any line of credit or debt obligation, or become the
guarantor, surety, endorser or otherwise liable for any debt, obligation or
liability (contingent or otherwise) of any other Person, or change the terms of
payables or receivables;

       

      (vii) Subject
to any Lien (except for leases that do not materially impair the use of the
property subject thereto in their respective businesses as presently conducted),
any of the properties or assets (whether tangible or intangible) of the
Companies;

       

      (viii) Acquire
any material properties or assets or sell, assign, transfer, convey, lease or
otherwise dispose of any of the material properties or assets (except for fair
consideration in the ordinary course of business consistent with past practice)
of the Companies;

       

      (ix) Cancel or
compromise any debt or claim or waive or release any material right of the
Companies except in the ordinary course of business consistent with past
practice;

       

      (x) Enter
into any commitment for capital expenditures or the purchase of assets out of
the ordinary course in excess of $50,000;

       

      (xi) Permit
the Companies to enter into any transaction or to make or enter into any
Contract which by reason of its size or otherwise is not in the ordinary course
of business consistent with past practice;

       

      (xii) Permit
the Companies to enter into or agree to enter into any merger or consolidation
with any corporation or other entity, or engage in any new business, or invest
in, make a loan, advance or capital contribution to, or otherwise acquire the
securities of any other Person;

       

       

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      (xiii) Except
for transfers of cash pursuant to normal cash management practices, permit the
Companies to make any investments in or loans to, or pay any fees or expenses
to, or enter into or modify any Contract with, the Sellers or any Affiliate of
the Sellers; or

       

      (xiv) Agree to
do anything prohibited by this Section 6.2 or anything which would make any of
the representations and warranties of the Sellers in this Agreement or the
Employment Agreement untrue or incorrect in any material respect as of any time
through and including the Closing.

       

      6.3           Consents.

       

      The
Sellers and the Companies shall use their best efforts, and the Purchaser shall
cooperate with the Sellers and the Companies, to obtain at the earliest
practicable date all consents and approvals required to consummate the
transactions contemplated by this Agreement, including, without limitation, the
consents and approvals referred to in Schedule 4.7 hereto; provided,
however, that neither the Sellers, the Companies nor the Purchaser shall be
obligated to pay any consideration therefor to any third party from whom consent
or approval is requested.

       

      6.4           Other
Actions.

       

      Each of
the Sellers, the Companies and the Purchaser shall use its best efforts to (i)
take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.

       

      6.5           No
Solicitation.

       

      The
Sellers will not, and will not cause or permit the Companies or any of the
Companies’ directors, officers, employees, representatives or agents
(collectively, the "Representatives") to, directly or indirectly, prior to
October 30, 2008, (i) discuss, negotiate, undertake, authorize, recommend,
propose or enter into, either as the proposed surviving, merged, acquiring or
acquired corporation, any transaction involving a merger, consolidation,
business combination, purchase or disposition of any amount of the assets or
capital stock or other equity interest in the Companies other than the
transactions contemplated by this Agreement (an "Acquisition Transaction"), (ii)
facilitate, encourage, solicit or initiate discussions, negotiations or
submissions of proposals or offers in respect of an Acquisition Transaction,
(iii) furnish or cause to be furnished, to any Person, any information
concerning the business, operations, properties or assets of the Companies in
connection with an Acquisition Transaction, or (iv) otherwise cooperate in any
way with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other Person to do or seek any of the foregoing.  The
Sellers will inform the Purchaser in writing immediately following the receipt
by Sellers, the Companies or any Representative of any proposal or inquiry in
respect of any Acquisition Transaction.

       

       

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      6.6           Preservation of
Records.

       

      The
Sellers and the Purchaser agree that each of them shall preserve and keep the
records held by it relating to the business of the Companies for a period of
three years from the Closing Date and shall make such records and personnel
available to the other as may be reasonably required by such party in connection
with, among other things, any insurance claims by, legal proceedings against or
governmental investigations of the Sellers or the Purchaser or any of their
Affiliates or in order to enable the Sellers or the Purchaser to comply with
their respective obligations under this Agreement and each other agreement,
document or instrument contemplated hereby or thereby. 

       

      6.7           Publicity.

       

      None of
the Sellers, the Companies nor the Purchaser shall issue any press release or
public announcement concerning this Agreement or the transactions contemplated
hereby without obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed, unless, in the sole
judgment of the Purchaser, the Companies or the Sellers, disclosure is otherwise
required by applicable Law or by the applicable rules of any stock exchange on
which the Purchaser lists securities, provided that, to the extent required by
applicable law, the party intending to make such release shall use its best
efforts consistent with such applicable law to consult with the other party with
respect to the text thereof.

       

      6.8           Use of
Name.

       

      The
Sellers hereby agree that upon the consummation of the transactions contemplated
hereby, the Purchaser and the Companies shall have the sole right to the use of
all of the names utilized by the Companies and any derivation of the
aforementioned names, and the Sellers shall not and shall not cause or permit
any Affiliate to use such name or any variation or simulation
thereof.  

       

      6.9           Intentionally left
blank.

       

      6.10         Assignment
Agreement.

       

      On or prior to the Closing Date,
Central Fort Myers Resources, Inc. (“Central Fort Myers”), LMR Imaging, a
Florida general partnership (“LMR”) and Diagnostic Imaging shall enter into that
certain Assignment Agreement, substantially in the form of agreement attached
hereto as Exhibit 6.10
(the “Assignment Agreement”) whereby Central Fort Myers shall assign to
Purchaser its interest in the Management Agreement entered into between Central
Fort Myers and LMR and dated March 27, 1998 (the “Management
Agreement”).  Notwithstanding this assignment, through June 30, 2009,
Central Fort Myers will continue to provide billing and collection services for
the Riverwalk Center (the “Riverwalk Services”) and to collect the monthly
management fee and Reimbursable Expenses (as defined in the Management
Agreement), relating solely to the Riverwalk Services.  

       

       

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      6.11         Purchase of the Riverwalk
Center

      

      It is contemplated and expected that
LMR shall dissolve as of June 30, 2009 and that, upon dissolution, Central Fort
Myers will receive 100% ownership of an imaging center in Fort Myers Florida
(the “Riverwalk Center”).  Provided that occurs, and provided that
Purchaser provides MRI and Central Fort Myers with proof of financing sufficient
to purchase 100% ownership of the Riverwalk Center by April 30, 2009, Central
Fort Myers shall sell such ownership (i.e., all of the assets) as of July 1,
2009.  Purchaser shall have the option of purchasing those assets as a
stock or asset purchase.  The purchase price, to be paid in full in
cash on July 1, 2009, shall be equal to the last twelve month EDITDA of the
Riverwalk Center from July 1, 2007 through June 30, 2008 or such purchase price
mutually agreed upon by the parties.  Whether as a stock purchase or
asset transfer, the transaction shall not include the accounts receivable of the
Riverwalk Center through June 30, 2009.  The Purchaser expressly
acknowledges that all accounts receivable, as of and including June 30, 2009,
will be the property of Central Fort Myers (if an asset transfer) and Medical
Resources (if Purchaser purchases the stock of Central Fort Myers) and the
Purchaser further acknowledges that it will have no claim to the accounts
receivable prior to July 1, 2009.  Medical Resources shall have sole
responsibility for collecting accounts receivable as of June 30, 2009, and
Medical Resources and Central Fort Myers  expressly acknowledge that
all accounts receivable as of July 1, 2009 will be property of the
Purchaser

      

      6.12         Financial
Statements.

       

      The
Sellers shall deliver the Financial Statements (as defined in Section 4.8 of
this Agreement) to the Purchaser on or prior to the Closing Date.

      

      6.13         Sarasota
Release.

      

      On or
prior to the Closing Date, the Sellers and the Purchaser shall enter into a
release agreement, substantially in the form of agreements attached hereto as
Exhibit 6.13 (the
“Release”), providing the Purchaser with a full release of all potential
liability associated with Sarasota Outpatient MRI & Diagnostic Center (the
“Sarasota Center”), including, but not limited to any liability to the landlord
of the Sarasota Center.

      

      6.14         Tax
Election.

       

      At the
sole discretion of the Purchaser, the Sellers will join in making a timely
election under Internal Revenue Code Section 338(h)(10) which such election
shall only apply to the portion of the Sellers’ consolidated Tax Return relating
to the Companies.

      

      6.15         Tax
Matters.

       

                 (a)           Tax Periods Ending on or
Before the Closing Date.  The Sellers shall prepare or cause to
be prepared and file or cause to be filed all Tax Returns for the Companies for
all periods through and including the Closing Date which are filed after the
Closing Date as soon as practicable and prior to the date due (including any
proper extensions thereof).  Such Tax Returns for the Companies shall
be filed on a consolidated basis together with MRI and other subsidiaries of
MRI.  The Sellers shall permit the Companies and the Purchaser to
review and provide comments, if any, on each the pro forma version of such
Return as it relates to each of the Companies (the “Pro Forma Return”) described
in the preceding sentence prior to filing.  The Companies shall
deliver to the Sellers each such Pro Forma Return signed by the appropriate
officer(s) of the Companies for filing within ten (10) days following the
Sellers’ delivery to the Companies and the Purchaser of any such Pro Forma
Return after having taken into account Purchaser’s comments, if
any.  The Sellers shall deliver to the Companies promptly after filing
each such Return a copy of the filed Pro Forma Return and evidence of its
filing.  The Sellers shall pay the costs and expenses incurred in the
preparation and filing of the Tax Returns on or before the date such costs and
expenses are due.

       

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      
 

      If the Companies provide comments to
the Sellers and at the end of such ten (10) day period the Companies and the
Sellers have failed to reach written agreement with respect to all of such
disputed items, the parties shall submit the unresolved items to arbitration for
final determination. Promptly, but no later than thirty (30) days after its
acceptance of its appointment as arbitrator, the arbitrator shall render an
opinion as to the disputed items. The determination of the arbitrator shall be
conclusive and binding upon the parties. The Companies and the Sellers (as a
group) shall each pay one half of the fees, costs and expenses of the
arbitrator. The prevailing party may be entitled to an award of pre- and
post-award interest as well as reasonable attorneys’ fees incurred in connection
with the arbitration and any judicial proceedings related thereto as determined
by the arbitrator.

      

                 (b)           Tax Periods Beginning Ending
After the Closing Date.  The Companies or the Purchaser shall
prepare or cause to be prepared and file or cause to be filed any Returns of the
Companies for Tax periods that begin and end after the Closing
Date.

      

                 (c)           Refunds and Tax
Benefits.  Any Tax refunds that are received after the Closing
Date by the Sellers (other than tax refunds received in connection with such
Seller’s individual tax Returns), the Purchaser or the Companies, and any
amounts credited against Tax to which the Sellers, the Purchaser or the
Companies become entitled, shall be for the account of the Sellers.

      

                 (d)           Cooperation on Tax
Matters.

      

                            (i)           The
Purchaser, the Companies and the Sellers shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing of
any Returns pursuant to this Section and any audit, litigation or other
proceeding with respect to Taxes assessed against the Companies.  Such
cooperation shall include the retention and (upon the other party's request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder.  The Companies and the Sellers agree
(A) to retain all books and records with respect to Tax matters pertinent to the
Companies relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by the
Purchaser or the Sellers, any extensions thereof) of the respective tax periods,
and to abide by all record retention agreements entered into with any taxing
authority, and (B) to give the other party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other party so requests, the Companies or the Sellers, as the case may be, shall
allow the other party to take possession of such books and records.

      

                            (ii)           The
Purchaser and the Sellers further agree, upon request, to use their best efforts
to obtain any certificate or other document from any governmental authority or
any other Person as may be necessary to mitigate, reduce or eliminate any Tax
that could be imposed against any of the parties hereto (including, but not
limited to, with respect to the transactions contemplated hereby).

      

                            (iii)           The
Purchaser and the Sellers further agree, upon request, to provide the other
party with all information that either party may be required to report pursuant
to §6043 of the Code and all Treasury Department Regulations promulgated
thereunder.

       

       

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      
 

      ARTICLE
VII

      CONDITIONS
TO CLOSING

       

      7.1           Conditions Precedent to
Obligations of Purchaser.

       

      The
obligation of the Purchaser to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by the
Purchaser in whole or in part to the extent permitted by applicable
law):

       

      (a) to the
best of Sellers’ knowledge, all representations and warranties of the Sellers
and the Companies contained herein shall be true and correct as of the date
hereof;

       

      (b) to the
best of Sellers’ knowledge, all representations and warranties of the Sellers
contained herein qualified as to materiality shall be true and correct, and the
representations and warranties of the Sellers and the Companies contained
herein not qualified as to materiality shall be true and correct in all material
respects as of the Closing Date with the same effect as though those
representations and warranties had been made again at and as of that
time;

       

      (c) to the
best of Sellers’ knowledge, the Sellers and the Companies shall have performed
and complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by  them
on or prior to the Closing Date;

       

      (d) the
Purchaser shall have been furnished with certificates (dated the Closing Date
and in form and substance reasonably satisfactory to the Purchaser) executed by
Sellers certifying as to the fulfillment of the conditions specified in Sections
7.1(a), 7.1(b) and 7.1(c) hereof;

       

      (e) Certificates
representing 100% of the Securities shall have been, or shall at the Closing be,
validly delivered and transferred to the Purchaser, free and clear of any and
all Liens;

       

      (f) there
shall not have been or occurred any Material Adverse Change;

       

      (g) the
Sellers and the Companies shall have obtained all consents and waivers referred
to in Schedule 4.7 hereto, in a form
reasonably satisfactory to the Purchaser, with respect to the transactions
contemplated by this Agreement and the Employment Agreement;

       

      (h) no Legal
Proceedings shall have been instituted or threatened or claim or demand made
against the Sellers and the Companies, or the Purchaser seeking to restrain or
prohibit or to obtain substantial damages with respect to the consummation of
the transactions contemplated hereby, and there shall not be in effect any order
by a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby;

       

      (i) intentionally
left blank;

       

       

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      (j) the
Sellers shall deliver a legal opinion, a form of which will be provided by the
Purchaser, to the Purchaser (the “Opinion”);

       

      (k) the
Assumed Debt Agreements shall have been executed and delivered;

       

      (l) intentionally
left blank;

       

      (m)  the
Assignment Agreement shall have been executed and delivered;

       

      (n) the
Release shall have been executed and delivered; and

       

      (o) the
Purchaser shall have received information satisfactory in its sole discretion to
verify the accuracy of all financial information delivered by the Sellers to the
Purchaser.

       

      7.2           Conditions Precedent to
Obligations of the Sellers and the Companies.

       

      The
obligations of the Sellers and the Companies to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Sellers and the Companies in whole or in part to the extent
permitted by applicable law):

       

      (a) all
representations and warranties of the Purchaser contained herein shall be true
and correct as of the date hereof;

       

      (b) all
representations and warranties of the Purchaser contained herein qualified as to
materiality shall be true and correct and all representations and warranties of
the Purchaser contained herein not qualified as to materiality shall be true and
correct in all material respects,  as of the
Closing Date with the same effect as though those representations and warranties
had been made again at and as of that date;

       

      (c) the
Purchaser shall have performed and complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied
with by Purchaser on or prior to the Closing Date;

       

       

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      (d) the
Sellers shall have been furnished with certificates (dated the Closing Date and
in form and substance reasonably satisfactory to the Sellers) executed by the
Chief Executive Officer and Chief Financial Officer of the Purchaser certifying
as to the fulfillment of the conditions specified in Sections 7.2(a), 7.2(b) and
7.2(c);

       

      (e) no Legal
Proceedings shall have been instituted or threatened or claim or demand made
against the Sellers, the Companies, or the Purchaser seeking to restrain or
prohibit or to obtain substantial damages with respect to the consummation of
the transactions contemplated hereby, and there shall not be in effect any Order
by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
and

       

      (f) intentionally
left blank;

       

      (g) intentionally
left blank; 

       

      (h) the
Assumed Debt Agreements shall have been executed and delivered; and

       

      (i) the
Assignment Agreement shall have been executed and delivered;

      

      ARTICLE
VIII

      DOCUMENTS
TO BE DELIVERED

       

      8.1           Documents to be Delivered by
the Sellers.

       

      At the
Closing, the Sellers shall deliver, or cause to be delivered, to the Purchaser
the following:

       

      (a) stock
certificates representing the Securities, duly endorsed in blank or accompanied
by stock transfer powers and with all requisite stock transfer tax stamps
attached;

       

      (b) the
certificates referred to in Section 7.1(d) and 7.1(e) hereof;

       

      (c) copies of
all consents and waivers referred to in Section 7.1(g) hereof; and

       

      (d) certificate
of good standing with respect to the Companies issued by the Secretary of State
of the State of incorporation, and for each state in which the Companies is
qualified to do business as a foreign corporation; 

       

      (e)  intentionally left
blank;

      

      (f)  intentionally left
blank;

      

      (g)  the
Assumed Debt Agreements;

       

      (h)  the
Assignment Agreement;

       

       

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

       

      (i) 
 the Release;

      

      (j)  the
Opinion; and

       

      (k) such other documents as the
Purchaser shall reasonably request.

       

      8.2           Documents to be Delivered by
the Purchaser.

       

      At the
Closing, the Purchaser shall deliver to the Sellers the following:

       

      (a) The Cash
Purchase Price;

       

      (b)  the
certificates referred to in Section 7.2(d) hereof;

      

      (c)  intentionally
left blank;

       

      (d)  Assumed
Debt Agreements;

       

      (e)  intentionally
left blank;

       

      (f)   the
Assignment Agreement;

       

      (g)   the
Release; and

       

      (h)   such
other documents as the Sellers shall reasonably request.

       

      

      ARTICLE
IX

      INDEMNIFICATION

       

      9.1           Indemnification.

       

      (a)           Subject
to Section 9.2 hereof, the Sellers and MRI hereby agree to indemnify and hold
the Purchaser, the Companies, and their respective directors, officers,
employees, Affiliates, agents, successors and assigns (collectively, the
"Purchaser Indemnified Parties") harmless from and against:

       

      (i)           any
and all liabilities of the Companies of every kind, nature and description,
absolute or contingent, existing as against the Companies prior to and including
the Closing Date or thereafter coming into being or arising by reason of any
state of facts existing, or any transaction entered into, on or prior to the
Closing Date, except for the Assumed Debt;   

       

      (ii)           subject
to Section 9.3, any and all losses, liabilities, obligations, damages, costs and
expenses (collectively, the “Losses”) based upon, attributable to or resulting
from the failure of any representation or warranty of the Sellers set forth in
Section 4 hereof, or any representation or warranty contained in any certificate
delivered by or on behalf of the Sellers pursuant to this Agreement, to be true
and correct in all material respects as of the date made;

       

       

       

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      (iii) any and
all Losses based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of the Sellers under this
Agreement;

       

      (iv) any and
all notices, actions, suits, proceedings, claims, demands, assessments,
judgments, costs, penalties and expenses, including reasonable attorneys' and
other reasonable professionals' fees and disbursements (collectively,
"Expenses") incident to any and all Losses with respect to which indemnification
is provided pursuant to this Section 9.1(a)

       

      (j) Subject
to Section 9.2, Purchaser hereby agrees to indemnify and hold the Sellers and
their respective Affiliates, agents, successors and assigns (collectively, the
"Sellers’ Indemnified Parties") harmless from and against:

       

      (i) any and
all Losses based upon, attributable to or resulting from the failure of any
representation or warranty of the Purchaser set forth in Section 5 hereof, or
any representation or warranty contained in any certificate delivered by or on
behalf of the Purchaser pursuant to this Agreement, to be true and correct in
all material respects as of the date made;

       

      (ii) any and
all Losses based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of the Purchaser under this Agreement or
arising from the ownership or operation of the Companies from and after the
Closing Date; and

       

      (iii) any and
all Expenses incident to the foregoing.

       

      

      9.2           Limitations on
Indemnification for Breaches of Representations and
Warranties.

       

      An
indemnifying party shall not have any liability under Section 9.1(a) or Section
9.1(b) hereof unless the aggregate amount of Losses and Expenses to the
indemnified parties finally determined to arise thereunder based upon,
attributable to or resulting from the failure of any representation or warranty
to be true and correct, or any breach hereof,  exceeds $150,000 (the
“Basket”) and, in such event, the indemnifying party shall be required to pay
the entire amount of such Losses and Expenses in excess of $25,000 (the
“Deductible”), up to a maximum of $1,000,000.

       

      9.3           Indemnification
Procedures.

       

      (a)           In
the event that any Legal Proceedings shall be instituted or that any claim or
demand ("Claim") shall be asserted by any Person in respect of which payment may
be sought under Section 9.1 hereof (regardless of the Basket or the Deductible
referred to above), the indemnified party shall reasonably and promptly cause
written notice of the assertion of any Claim of which it has knowledge which is
covered by this indemnity to be forwarded to the indemnifying
party.  The indemnifying party shall have the right, at its sole
option and expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to the indemnified party, and to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
of the indemnified party indemnified against hereunder.  If the
indemnifying party elects to defend against, negotiate, settle or otherwise deal
with any Claim which relates to any Losses of the indemnified party indemnified
against hereunder, it shall within five (5) days (or sooner, if the nature of
the Claim so requires) notify the indemnified party of its intent to do
so.  If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
of the indemnified party indemnified against hereunder, fails to notify the
indemnified party of its election as herein provided or contests its obligation
to indemnify the indemnified party for such Losses under this Agreement, the
indemnified party may defend against, negotiate, settle or otherwise deal with
such Claim. If the indemnifying party shall assume the defense of any such
Claim, the indemnified party may participate, at his or its own expense, in the
defense of such Claim; provided, however, that such indemnified party shall be
entitled to participate in any such defense with separate counsel at the expense
of the indemnifying party if, (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the indemnified
party, a conflict or potential conflict exists between the indemnified party and
the indemnifying party that would make such separate representation advisable;
and provided, further, that the indemnifying party shall not be required to pay
for more than one such counsel for all indemnified parties in connection with
any Claim.  The parties hereto agree to cooperate fully with each
other in connection with the defense, negotiation or settlement of any such
Claim.

       

       

       

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      (b) After any
final judgment or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the expiration of the
time in which to appeal therefrom, or a settlement shall have been consummated,
or the indemnified party and the indemnifying party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such
matter, as determined by such court, board or agency or pursuant to such
settlement against, as the case may be and the indemnifying party shall be
required to pay all of the sums so due and owing to the indemnified party by
wire transfer of immediately available funds within 10 business days after the
date of such notice.

       

      9.4           Tax Treatment of Indemnity
Payments.

       

      The
Sellers and the Purchaser agree to treat any indemnity payment made pursuant to
this Article 9 as an adjustment to the Purchase Price for federal, state, local
and foreign income tax purposes.

       

      9.5           No Right of Set
Off.

       

      The Sellers and Purchaser agree than
any indemnification claim shall not be set off by any party without final
adjudication specific to the indemnity claim and the right to set
off.

      

      ARTICLE
X

      MISCELLANEOUS

       

      10.1         Payment of Sales, Use or
Similar Taxes.

       

      All
sales, use, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges, of any nature whatsoever, applicable to, or resulting from,
the transactions contemplated by this Agreement shall be borne solely by the
Sellers.

       

      10.2         Survival of Representations
and Warranties.

       

      The
parties hereto hereby agree that the representations and warranties contained in
this Agreement or in any certificate, document or instrument delivered in
connection herewith, shall survive the execution and delivery of this Agreement,
and the Closing hereunder, regardless of any investigation made by the parties
hereto; provided, however, that any claims or actions with respect thereto shall
terminate unless within twelve (12) months after the Closing Date written notice
of such claims is given to the Sellers or such actions are
commenced.

       

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

       

       

      10.3         Expenses.

       

      Except as
otherwise provided in this Agreement, the Sellers and the Purchaser shall each
bear its own expenses incurred in connection with the negotiation and execution
of this Agreement and each other agreement, document and instrument contemplated
by this Agreement and the consummation of the transactions contemplated hereby
and thereby, it being understood that in no event shall the Companies bear any
of such costs and expenses.

       

      10.4         Specific
Performance.

       

      (a)           The
Sellers acknowledge and agree that the breach of this Agreement would cause
irreparable damage to the Purchaser and that the Purchaser will not have an
adequate remedy at law.  Therefore, the obligations of the Sellers
under this Agreement, including, without limitation, the Sellers’ obligation to
sell the Securities to the Purchaser, shall be enforceable by a decree of
specific performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in connection
therewith.  Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which any party may
have under this Agreement or otherwise.

       

      (b)           The
Purchaser acknowledges and agrees that the breach of this Agreement would cause
irreparable damage to the Sellers and that the Sellers will not have an adequate
remedy at law.  Therefore, the obligations of the Purchaser under this
Agreement, including, without limitation, the Purchaser’s obligation to purchase
the Securities from the Sellers, shall be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and appropriate
injunctive relief may be applied for and granted in connection
therewith.  Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which any party may
have under this Agreement or otherwise.

      

      10.5         Further
Assurances.

       

      The
Sellers and the Purchaser each agrees to execute and deliver such other
documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.

       

      10.6         Submission to Jurisdiction;
Consent to Service of Process.

       

      (a)           The
parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of
any federal or state court located within the State of Florida over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action proceeding related thereto may be
heard and determined in such courts.  The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute.  Each of the parties hereto agrees that a judgment in
any such dispute may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

       

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

       

       

      (b)           Each
of the parties hereto hereby consents to process being served by any party to
this Agreement in any suit, action or proceeding by the mailing of a copy
thereof in accordance with the provisions of Section 10.10.

       

      10.7         Entire Agreement; Amendments
and Waivers.

       

                 This
Agreement (including the Letter of Intent, the terms of which are incorporated
herein, together with all schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior or contemporaneous agreements or
understandings among the parties with regard to the subject matter
hereof.  This Agreement can be amended, supplemented or changed, and
any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought.  No
action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein.  The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a further or continuing waiver of such breach or as a waiver of
any other or subsequent breach.  No failure on the part of any party
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.  All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.

       

      10.8         Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the state of Florida.

       

      10.9          Table of Contents and
Headings.

       

      The table
of contents and section headings of this Agreement are for reference purposes
only and are to be given no effect in the construction or interpretation of this
Agreement.

       

      10.10       Notices.

       

      All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when delivered personally or mailed by certified mail,
return receipt requested, or by reputable overnight courier to the parties (and
shall also be transmitted by facsimile to the Persons receiving copies thereof)
at the following addresses (or to such other address as a party may have
specified by notice given to the other party pursuant to this
provision):

       

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

       

       

             
(a) Purchaser:

      

      US Imaging Holding, LLC

                                
600 North Cattleman Road

      Sarasota,
Florida  34232

      Attn:  Kay Carter,
CFO

      Phone:  (941)
488-5791

      Facsimile:
(941)  377-2865

      

      Copy to:

      

      Stephen Fleming, Esq.

      Law Offices of Stephen M. Fleming
PLLC

      403 Merrick Avenue, 2nd
Floor

      East Meadow, New York
11554

      Phone:  (516)
833-5034

      Facsimile: (516) 997-1209

      

      (b) Sellers
and Companies:

      

      Medical
Resources, Inc

      1455
Broad Street

      Bloomfield
,  NJ   07003

      Attn:
John Valla, President and CEO

      Phone:
(973) 873-9850

      Fax (973)
707-1011

      

      Copy
to:

      

      Patricia
Hewitt, Esq.

      Ingram
Yuzek Gainen Carroll & Bertolotti, LLP

      250 Park
Avenue

      New York,
NY 10177

      Phone:
(212) 907-9608

      Fax:
(212) 907-9681

      

       

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

       

       

      
 

      10.11       Severability.

       

      If any
provision of this Agreement is invalid or unenforceable, the balance of this
Agreement shall remain in effect.

       

      10.12       Binding Effect;
Assignment.

       

      This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as provided
below.  No assignment of this Agreement or of any rights or
obligations hereunder may be made by any of the Sellers, the Companies or the
Purchaser (by operation of law or otherwise) without the prior written consent
of the other parties hereto and any attempted assignment without the
required consents shall be void; provided, however, that the Purchaser may
assign this Agreement and any or all rights or obligations hereunder (including,
without limitation, the Purchaser’s rights to purchase the Securities and the
Purchaser’s rights to seek indemnification hereunder) to any Affiliate of the
Purchaser.  Upon any such permitted assignment, the references in this
Agreement to the Purchaser shall also apply to any such assignee unless the
context otherwise requires.

       

      [Remainder
of Page Intentionally Left Blank]

       

       

       

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      
           
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

       

      
        
          
            
              
                
                  	PURCHASER	 	 	 	 
	 	 	 	 	 
	US IMAGING HOLDING,
      LLC	 	 	 	 
	 	 	 	 	 
	
                          /s/
      Dr. Stephen Miley

                        	 	 	
                           

                        	 
	
                          Name:
      Dr. Stephen Miley

                        	 	 	
                           

                        	 
	
                          Title:
      CEO

                        	 	 	
                           

                        	 

                

              

            

          

        

      
        
          
            
              
                	COMPANIES	 	 	 	 
	 	 	 	 	 
	 CLEARWATER RESOURCES,
      INC.	 	 	BRADENTON RESOURCES,
      INC.	 
	 	 	 	 	 
	
                        /s/
      John Valla

                      	 	 	
                        /s/
      John Valla

                      	 
	
                        Name:
      John Valla 

                      	 	 	
                        Name:  John
      Valla

                      	 
	
                        Title:
      VP 

                      	 	 	
                        Title:
      VP

                      	 

              

            

          

        

      

      

      
        
          
            
              
                
                  
                    	 	 	 	 	 
	 MORGAN MEDICAL
      CORPORATION 	 	 	 MRI-SOUTH UMBERTON,
      INC.	 
	 	 	 	 	 
	 	 	 	 	 
	
                            /s/
      John Valla

                          	 	 	
                            /s/
      John Valla

                          	 
	
                            Name:
      John Valla

                          	 	 	
                            Name: John
      Valla

                          	 
	
                            Title:
      VP 

                          	 	 	
                            Title:
      VP

                          	 

                  

                

              

            

          

        

      
        
          
            
              	 JACKSONVILLE RESOURCES,
      INC.	 	 	 CHARLOTTE RESOURCES,
      INC.	 
	 	 	 	 	 
	 	 	 	 	 
	
                      /s/
      John Valla

                    	 	 	
                      /s/
      John Valla

                    	 
	
                      Name:
      John Valla

                    	 	 	
                      Name: John
      Valla

                    	 
	
                       Title:
      VP 

                    	 	 	
                      Title:
      VP

                    	 

            

             

          

        

      

      SELLERS

       

      
        
          
            	DIAGNOSTIC IMAGING RESOURCES,
      LLC	 	 	 	 
	 	 	 	 	 
	
                    /s/
      John Valla

                  	 	 	
                    /s/
      John Valla

                  	 
	
                    Name:
      John Valla 

                  	 	 	
                    Name:   John
      Valla

                  	 
	
                    Title:
      VP

                  	 	 	
                    Title:
      VP

                  	 

          

        

      

       

      
        
          
            
              	MORGAN MEDICAL HOLDINGS,
      INC.	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                      /s/
      John Valla

                    	 	 	
                      /s/
      John Valla

                    	 
	
                      Name:
      John Valla 

                    	 	 	
                      Name:  John
      Valla

                    	 
	
                      Title:
      VP

                    	 	 	
                      Title:
      VP

                    	 

            

          

        

      

       

    

    
      
        
          
            
              
                	MEDICAL RESOURCES,
      INC.	 	 	 	 
	(WITH RESPECT TO ARTICLES IV
      AND IX)	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                        /s/
      John Valla

                      	 	 	
                         

                      	 
	
                        Name:
      John Valla

                      	 	 	
                         

                      	 
	
                        Title:
      VP

                      	 	 	
                         

                      	 

              

            

          

        

      

    

    
       

      
        
          
            
              
                
                  	CENTRAL FORT MYERS RESOURCES,
      INC.	 	 	 	 
	 (WITH RESPECT TO SECTIONS 6.10
      AND 6.11)	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                          /s/
      John Valla

                        	 	 	
                           

                        	 
	
                          Name:
      John Valla

                        	 	 	
                           

                        	 
	
                          Title:
      VP

                        	 	 	
                           

                        	 

                

              

            

          

        

      

      

       

       

       

      41exh4-1.htm

    
      Exhibit 4.1

      2008
EQUITY COMPENSATION PLAN

      

      I.  ESTABLISHMENT
OF PLAN; DEFINITIONS

      

      1.           Purpose.  The
purpose of the ZAP 2008 Equity Compensation Plan is to encourage certain,
officers, employees, directors and consultants of ZAP, a California corporation
(the "Corporation") to acquire and hold stock in the Corporation as an added
incentive to remain with the Corporation and to increase their efforts in
promoting the interests of the Corporation and to enable the Corporation to
attract and retain capable individuals.

      

      2.           Definitions.  Unless
the context clearly indicates otherwise, the following terms shall have the
meanings set forth below:

      (a)           “Award”
shall mean the grant of any Stock Option or Stock Award pursuant to the
Plan.

      (a)           "Board"
shall mean the Board of Directors of the Corporation.

      (b)           "Code"
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time.

      (c)           "Committee"
shall mean a committee made up of at least two members of the Board whose
members shall, from time to time, be appointed by the Board.  If a
Committee has not been appointed by the Board, “Committee” shall mean the
Board.

      (d)           "Corporation"
shall mean ZAP, a California corporation.

      (e)           "Consultants"
shall mean individuals or entities that provide services to the Corporation who
are not Employees or Directors.

      (f)           "Directors"
shall mean those members of the Board of Directors of the Corporation who are
not Employees.

      (g)           "Disability"
shall mean a medically determinable physical or mental condition which causes an
Employee, Director or Consultant to be unable to engage in any substantial
gainful activity and which can be expected to result in death or to be of
long-continued and indefinite duration.

      (h)           "Employee"
shall mean any common law employee, including officers, of the Corporation as
determined under the Code and the Treasury Regulations thereunder.

      (i)           "Fair
Market Value" with regards to the grant of Stock Options shall mean (i) if the
Stock is listed on a national securities exchange, the mean between the highest
and lowest sales prices for the Stock on such date, or, if no such prices are
reported for such day, then on the next preceding day on which there were
reported prices; (ii) if the Stock is not listed on a national securities
exchange, the closing price for the shares on such date, or if no such prices
are reported for such day, then on the next preceding day on which there were
reported prices; or (iii) as determined in good faith by the
Board.  “Fair Market Value” with regards to Stock Awards shall be
determined by the Board, in good faith and in its sole discretion.

      (j)           "Grantee"
shall mean an officer, Employee, Director or Consultant granted a Stock Option
or Stock Award under this Plan.

      (k)           "Incentive
Stock Option" shall mean an option granted pursuant to the Incentive Stock
Option provisions as set forth in Part II of this Plan.

      (l)           "Non-Qualified
Stock Option" shall mean an option granted pursuant to the Non-Qualified Stock
Option provisions as set forth in Part III of this Plan.

      (m)           "Plan"
shall mean the ZAP 2008 Equity Compensation Plan as set forth herein and as
amended from time to time.

      (n)           "Restricted
Stock" shall mean Stock which is issued pursuant to the Restricted Stock as set
forth in Part IV of this Plan.

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      (o)           "Stock"
shall mean authorized but unissued shares of the Common Stock of the Corporation
or reacquired shares of the Corporation's Common Stock.

      (p)           "Stock
Award" shall mean an award of Restricted or Unrestricted Stock granted pursuant
to this Plan.

      (q)           "Stock
Option" shall mean an option granted pursuant to the Plan to purchase shares of
Stock.

      (r)           "Ten
Percent Shareholder" shall mean an Employee who at the time a Stock Option is
granted owns stock possessing more than ten percent (10%) of the total combined
voting power of all stock of the Corporation or of its parent or subsidiary
corporation.

      (s)           "Unrestricted
Stock" shall mean Stock which is issued pursuant to the Unrestricted Stock
provisions as set forth in Part V of this Plan.

      

      3.           Shares of Stock Subject to
the Plan.  Subject to the provisions of Paragraph 2 of Part VI
of the Plan, the Stock which may be issued or transferred pursuant to Stock
Options and Stock Awards granted under the Plan and the Stock which is subject
to outstanding but unexercised Stock Options under the Plan shall not exceed
10,000,000 shares in the aggregate.  If a Stock Option shall expire
and terminate for any reason, in whole or in part, without being exercised or,
if Stock Awards are forfeited because the restrictions with respect to such
Stock Awards shall not have been met or have lapsed, the number of shares of
Stock which are no longer outstanding as Stock Awards or subject to Stock
Options may again become available for the grant of Stock Awards or Stock
Options.  There shall be no terms and conditions in a Stock Award or
Stock Option which provide that the exercise of an Incentive Stock Option
reduces the number of shares of Stock for which an outstanding Non-Qualified
Stock Option may be exercised; and there shall be no terms and conditions in a
Stock Award or Stock Option which provide that the exercise of a Non-Qualified
Stock Option reduces the number of shares of Stock for which an outstanding
Incentive Stock Option may be exercised.

      

      4.           Administration of the
Plan.  The Plan shall be administered by the
Committee.  Subject to the express provisions of the Plan, the
Committee shall have authority to interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to it, to determine the terms and
provisions of Stock Option agreements, and to make all other determinations
necessary or advisable for the administration of the Plan.  Any
controversy or claim arising out of or related to this Plan shall be determined
unilaterally by and at the sole discretion of the Committee.

      

      5.           Amendment or
Termination.  The Board may, at any time, alter, amend,
suspend, discontinue, or terminate this Plan; provided, however, that such
action shall not adversely affect the right of Grantees to Stock Awards or Stock
Options previously granted and no amendment, without the approval of the
stockholders of the Corporation, shall increase the maximum number of shares
which may be awarded under the Plan in the aggregate, materially increase the
benefits accruing to Grantees under the Plan, change the class of Employees
eligible to receive options under the Plan, or materially modify the eligibility
requirements for participation in the Plan.

      

      6.           Effective Date and Duration
of the Plan.

      

        This
Plan shall become effective on March 12, 2009.  This Plan shall
terminate at such time as may be determined by the Board, and no Stock Award or
Stock Option may be issued or granted under the Plan thereafter, but such
termination shall not affect any Stock Award or Stock Option theretofore issued
or granted.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      7.           General.

      (a)           Each
Stock Option and Stock Award shall be evidenced by a written instrument (which
may be in the form of a unanimous written consent of the Board) containing such
terms and conditions, not inconsistent with this Plan, as the Committee shall
approve.

      (b)           The
granting of a Stock Option or Stock Award in any year shall not give the Grantee
any right to similar grants in future years or any right to be retained in the
employ of the Corporation, and all Employees shall remain subject to discharge
to the same extent as if the Plan were not in effect.

      (c)           No
officer, Employee, Director or Consultant and no beneficiary or other person
claiming under or through him, shall have any right, title or interest by reason
of any Stock Option or any Stock Award to any particular assets of the
Corporation, or any shares of Stock allocated or reserved for the purposes of
the Plan or subject to any Stock Option or any Stock Award except as set forth
herein.  The Corporation shall not be required to establish any fund
or make any other segregation of assets to assure the payment of any Stock
Option or Stock Award.

      (d)           No
right under the Plan shall be subject to anticipation, sale, assignment, pledge,
encumbrance, or charge except by will or the laws of descent and distribution,
and a Stock Option shall be exercisable during the Grantee's lifetime only by
the Grantee or his conservator.

      (e)           Notwithstanding
any other provision of this Plan or agreements made pursuant thereto, the
Corporation's obligation to issue or deliver any certificate or certificates for
shares of Stock under a Stock Option or Stock Award, and the transferability of
Stock acquired by exercise of a Stock Option or grant of a Stock Award, shall be
subject to all of the following conditions:

      (i)           Any
registration or other qualification of such shares under any state or federal
law or regulation, or the maintaining in effect of any such registration or
other qualification which the Board shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable; and

      (ii)           The
obtaining of any other consent, approval, or permit from any state or federal
governmental agency which the Board shall, in its absolute discretion upon the
advice of counsel, determine to be necessary or advisable.

      (f)           All
payments to Grantees or to their legal representatives shall be subject to any
applicable tax, community property, or other statutes or regulations of the
United States or of any state or country having jurisdiction
thereof.  The Grantee may be required to pay to the Corporation the
amount of any withholding taxes which the Corporation is required to withhold
with respect to a Stock Option or its exercise or a Stock Award.  In
the event that such payment is not made when due, the Corporation shall have the
right to deduct, to the extent permitted by law, from any payment of any kind
otherwise due to such person all or part of the amount required to be
withheld.

      (g)           In
the case of a grant of a Stock Option or Stock Award to any Employee of a
subsidiary of the Corporation, the Corporation may, if the Committee so directs,
issue or transfer the shares, if any, covered by the Stock Option or Stock Award
to the subsidiary, for such lawful consideration as the Committee may specify,
upon the condition or understanding that the subsidiary will transfer the shares
to the Employee in accordance with the terms of the Stock Option or Stock Award
specified by the Committee pursuant to the provisions of the
Plan.  For purposes of this Section, a subsidiary shall mean any
subsidiary corporation of the Corporation as defined in Section 424 of the
Code.

      (h)           A
Grantee entitled to Stock as a result of the exercise of a Stock Option or grant
of a Stock Award shall not be deemed for any purpose to be, or have rights as, a
shareholder of the Corporation by virtue of such exercise, except to the extent
a stock certificate is issued therefor and then only from the date such
certificate is issued.  No adjustments shall be made for dividends or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued.  The Corporation shall issue any
stock certificates required to be

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      issued in
connection with the exercise of a Stock Option with reasonable promptness after
such exercise.

      (i)           The
grant or exercise of Stock Options granted under the Plan or the grant of a
Stock Award under the Plan shall be subject to, and shall in all respects comply
with, applicable law relating to such grant or exercise, or to the number of
shares of Stock which may be beneficially owned or held by any
Grantee.

      (j)           The
Corporation intends that the Plan shall comply with the requirements of Rule
16b-3 (the “Rule”) under the Securities Exchange Act of 1934, as amended, during
the term of this Plan. Should any additional provisions be necessary for the
Plan to comply with the requirements of the Rule, the Board may amend this Plan
to add to or modify the provisions of this Plan accordingly.

      (k)           The
Corporation intends that the Plan shall comply with the requirements of Section
409A of the Code, to the extent applicable.  Should any changes to the
Plan be necessary for the Plan to comply with the requirements of Code Section
409A the Board may amend this Plan to add to or modify the provisions of this
Plan accordingly.

      (l)           The
Corporation will seek stockholder approval in the manner and to the degree
required under applicable laws.  If the Corporation fails to obtain
stockholder approval of the Plan within twelve (12) months after the date this
Plan is adopted by the Board, pursuant to Section 422 of the Code, any Option
granted as an Incentive Option at any time under the Plan will not qualify as an
Incentive Option within the meaning of the Code and will be deemed to be a
Non-Statutory Option.

      (m)           The
Corporation intends that the Plan shall comply with the requirements of the
California Corporations Code during the term of this Plan. Should any additional
provisions be necessary for the Plan to comply with the requirements of the
California Corporations Code, the Board may amend this Plan to add to or modify
the provisions of this Plan accordingly.

      

      II.  INCENTIVE
STOCK OPTION PROVISIONS

      

      1.           Granting of Incentive Stock
Options.

      (a)           Only
Employees of the Corporation shall be eligible to receive Incentive Stock
Options under the Plan.  Officers, Directors and Consultants of the
Corporation who are not also Employees shall not be eligible to receive
Incentive Stock Options.

      (b)           The
purchase price of each share of Stock subject to an Incentive Stock Option shall
not be less than 100% of the Fair Market Value of a share of the Stock on the
date the Incentive Stock Option is granted; provided, however, that the purchase
price of each share of Stock subject to an Incentive Stock Option granted to a
Ten Percent Shareholder shall not be less than 110% of the Fair Market Value of
a share of the Stock on the date the Incentive Stock Option is
granted.

      (c)           No
Incentive Stock Option shall be exercisable more than ten years from the date
the Incentive Stock Option was granted; provided, however, that an Incentive
Stock Option granted to a Ten Percent Shareholder shall not be exercisable more
than five years from the date the Incentive Stock Option was
granted.

      (d)           The
Committee shall determine and designate from time to time those Employees who
are to be granted Incentive Stock Options and specify the number of shares
subject to each Incentive Stock Option.

      (e)           The
Committee, in its sole discretion, shall determine whether any particular
Incentive Stock Option shall become exercisable in one or more installments,
specify the installment dates, and, within the limitations herein provided,
determine the total period during

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      which the
Incentive Stock Option is exercisable.  Further, the Committee may
make such other provisions as may appear generally acceptable or desirable to
the Committee or necessary to qualify its grants under the provisions of Section
422 of the Code.

      (f)           The
Committee may grant at any time new Incentive Stock Options to an Employee who
has previously received Incentive Stock Options or other options whether such
prior Incentive Stock Options or other options are still outstanding, have
previously been exercised in whole or in part, or are canceled in connection
with the issuance of new Incentive Stock Options.  The purchase price
of the new Incentive Stock Options may be established by the Committee without
regard to the existing Incentive Stock Options or other options.

      (g)           Notwithstanding
any other provisions hereof, the aggregate Fair Market Value (determined at the
time the option is granted) of the Stock with respect to which Incentive Stock
Options are exercisable for the first time by the Employee during any calendar
year (under all such plans of the Grantee's employer corporation and its parent
and subsidiary corporation) shall not exceed $100,000.

       

      2.              Exercise of Incentive Stock
Options.  Upon the exercise of any Incentive Stock Option, the
option price for the Shares being purchased shall be payable to the Corporation
in full either: (a) in cash or its equivalent; or (b) subject to
the Committee’s approval, by delivery of previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total option
price (provided that the Shares that are delivered must have been held by the
Grantee for at least six (6) months prior to their delivery to satisfy the
option price); or (c) by a combination of (a) and (b); or (d) by any
other method approved by the Committee in its sole discretion. Unless otherwise
determined by the Committee, the delivery of previously acquired Shares may be
done through attestation. No fractional shares may be tendered or accepted in
payment of the option price.

       

      Unless
otherwise determined by the Committee, cashless exercises are permitted pursuant
to Federal Reserve Board’s Regulation T, subject to applicable securities
law restrictions, or by any other means which the Committee determines to be
consistent with this Plan’s purpose and applicable law.

       

      Subject
to any governing rules or regulations, as soon as practicable after receipt of
notification of exercise and full payment, the Company shall deliver to the
Grantee, in the Grantee’s name, Share certificates in an appropriate amount
based upon the number of Shares purchased pursuant to the Incentive Stock
Option(s).

       

      Unless
otherwise determined by the Committee, all payments under all of the methods
indicated above shall be paid in United States dollars.

      3.              Termination of
Employment.

      (a)           If
a Grantee's employment with the Corporation is terminated other than by
Disability or death, the terms of any then outstanding Incentive Stock Option
held by the Grantee shall extend for a period ending on the earlier of the date
on which such Stock Option would otherwise expire or three months after such
termination of employment, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of employment.

       

      (b)           If
a Grantee's employment with the Corporation is terminated by reason of
Disability, the term of any then outstanding Incentive Stock Option held by the
Grantee shall extend for a period ending on the earlier of the date on which
such Stock Option would otherwise expire or twelve months after such termination
of employment, and such Stock Option

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      shall be
exercisable to the extent it was exercisable as of such last date of
employment.

       

      (c)           If
a Grantee's employment with the Corporation is terminated by reason of death,
the representative of his estate or beneficiaries thereof to whom the Stock
Option has been transferred shall have the right during the period ending on the
earlier of the date on which such Stock Option would otherwise expire or twelve
months after such date of death, to exercise any then outstanding Incentive
Stock Options in whole or in part.  If a Grantee dies without having
fully exercised any then outstanding Incentive Stock Options, the representative
of his estate or beneficiaries thereof to whom the Stock Option has been
transferred shall have the right to exercise such Stock Options in whole or in
part.

       

      III.  NON-QUALIFIED
STOCK OPTION PROVISIONS

       

      1.           Granting of Stock
Options.

       

      (a)           Officers,
Employees, Directors and Consultants shall be eligible to receive Non-Qualified
Stock Options under the Plan.

       

      (b)           The
Committee shall determine and designate from time to time those officers,
Employees, Directors and Consultants who are to be granted Non-Qualified Stock
Options and the amount subject to each Non-Qualified Stock Option.

       

      (c)           The
Committee may grant at any time new Non-Qualified Stock Options to an Employee,
Director or Consultant who has previously received Non-Qualified Stock Options
or other Stock Options, whether such prior Non-Qualified Stock Options or other
Stock Options are still outstanding, have previously been exercised in whole or
in part, or are canceled in connection with the issuance of new Non-Qualified
Stock Options.

       

      (d)           The
Committee shall determine the purchase price of each share of Stock subject to a
Non-Qualified Stock Option.  Such price shall not be less than 100% of
the Fair Market Value of such Stock on the date the Non-Qualified Stock Option
is granted.

       

      (e)           The
Committee, in its sole discretion, shall determine whether any particular
Non-Qualified Stock Option shall become exercisable in one or more installments,
specify the installment dates, and, within the limitations herein provided,
determine the total period during which the Non-Qualified Stock Option is
exercisable.  Further, the Committee may make such other provisions as
may appear generally acceptable or desirable to the Committee, including the
extension of a Non-Qualified Stock Option, provided that such extension does not
extend the option
beyond the period specified in paragraph (f) below.

       

      (f)           No
Non-Qualified Stock Option shall be exercisable more than ten years from the
date such option is granted.

       

      2.              Exercise of Stock
Options.   Upon the exercise of any Non-Qualified Stock
Option, the option price for the Shares being purchased shall be payable to the
Corporation in full either: (a) in cash or its equivalent;
or (b) subject to the Committee’s approval, by delivery of previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total option price (provided that the Shares that are delivered
must have been held by the Grantee for at least six (6) months prior to their
delivery to satisfy the option price); or (c) by a combination of (a) and
(b); or (d) by any other method approved by the Committee in its
sole

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      discretion.
Unless otherwise determined by the Committee, the delivery of previously
acquired Shares may be done through attestation. No fractional shares may be
tendered or accepted in payment of the option price.

       

      Unless
otherwise determined by the Committee, cashless exercises are permitted pursuant
to Federal Reserve Board’s Regulation T, subject to applicable securities
law restrictions, or by any other means which the Committee determines to be
consistent with this Plan’s purpose and applicable law.

       

      Subject
to any governing rules or regulations, as soon as practicable after receipt of
notification of exercise and full payment, the Company shall deliver to the
Grantee, in the Grantee’s name, Share certificates in an appropriate amount
based upon the number of Shares purchased pursuant to the Non-Qualified Stock
Option(s).

       

      Unless
otherwise determined by the Committee, all payments under all of the methods
indicated above shall be paid in United States dollars.

      

       

       3.           Termination of
Relationship.

       

      (a)           If
a Grantee's employment with the Corporation is terminated, a Director Grantee
ceases to be a Director, or a Consultant Grantee ceases to be a Consultant,
other than by reason of Disability or death, the terms of any then outstanding
Non-Qualified Stock Option held by the Grantee shall extend for a period ending
on the earlier of the date established by the Committee at the time of grant or
three months after the Grantee's last date of employment or cessation of being a
Director or Consultant, and such Stock Option shall be exercisable to the extent
it was exercisable as of the date of termination of employment or cessation of
being a Director or Consultant.

       

      (b)           If
a Grantee's employment is terminated by reason of Disability, a Director Grantee
ceases to be a Director by reason of Disability or a Consultant Grantee ceases
to be a Consultant by reason of Disability, the term of any then outstanding
Non-Qualified Stock Option held by the Grantee shall extend for a period ending
on the earlier of the date on which such Stock Option would otherwise expire or
twelve months after the Grantee's last date of employment or cessation of being
a Director or Consultant, and such Stock Option shall be exercisable to the
extent it was exercisable as of such last date of employment or cessation of
being a Director or Consultant.

      (c)           If
a Grantee's employment is terminated by reason of death, a Director Grantee
ceases to be a Director by reason of death or a Consultant Grantee ceases to be
a Consultant by reason of death, the representative of his estate or
beneficiaries thereof to whom the Stock Option has been transferred shall have
the right during the period ending on the earlier of the date on which such
Stock Option would otherwise expire or twelve months following his death to
exercise any then outstanding Non-Qualified Stock Options in whole or in
part.  If a Grantee dies without having fully exercised any then
outstanding Non-Qualified Stock Options, the representative of his estate or
beneficiaries thereof to whom the Stock Option has been transferred shall have
the right to exercise such Stock Options in whole or in part.

       

      

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      IV.  RESTRICTED
STOCK AWARDS

       

      1.           Grant of Restricted
Stock.

       

      (a)  Officers,
Employees, Directors and Consultants shall be eligible to receive grants of
Restricted Stock under the Plan.

       

      (b)           The
Committee shall determine and designate from time to time those officers,
Employees, Directors and Consultants who are to be granted Restricted Stock and
the number of shares of Stock subject to such Stock Award.

       

      (c)           The
Committee, in its sole discretion, shall make such terms and conditions
applicable to the grant of Restricted Stock as may appear generally acceptable
or desirable to the Committee.

       

      2.           Termination of
Relationship.

       

      (a)           If
a Grantee's employment with the Corporation, a Director Grantee ceases to be a
Director, or a Consultant Grantee ceases to be a Consultant, prior to the lapse
of any restrictions applicable to the Restricted Stock such Stock shall be
forfeited and the Grantee shall return the certificates representing such Stock
to the Corporation.

       

      (b)           If
the restrictions applicable to a grant of Restricted Stock shall lapse, the
Grantee shall hold such Stock free and clear of all such restrictions except as
otherwise provided in the Plan.

       

      
 

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      V.  UNRESTRICTED
STOCK AWARDS

       

      1.           Grant of Unrestricted
Stock.

       

      (a)           Officers,
Employees, Directors and Consultants shall be eligible to receive grants of
Unrestricted Stock under the Plan.

       

      (b)           The
Committee shall determine and designate from time to time those officers,
Employees, Directors and Consultants who are to be granted Unrestricted Stock
and number of shares of Stock subject to such Stock Award.

       

      2.           Issuance of
Stock.  The Grantee shall hold Stock issued pursuant to an
Unrestricted Stock award free and clear of all restrictions except as otherwise
provided in the Plan.

       

      

       

      VI.  ADJUSTMENTS
UPON MERGER, REORGANIZATION, DISSOLUTION OR CHANGE IN CONTROL

       

      1.           Substitution of
Options.  In the event of a corporate merger or consolidation,
or the acquisition by the Corporation of property or stock of an acquired
corporation or any reorganization or other transaction qualifying under Section
424 of the Code, the Committee may, in accordance with the provisions of that
Section, substitute Stock Options and Stock Awards under this Plan for Stock
Options and Stock Awards and under the plan of the acquired corporation provided
(i) the excess of the aggregate Fair Market Value of the shares of Stock
subject to Stock Option immediately after the substitution over the aggregate
option price of such Stock is not more than the similar excess immediately
before such substitution and (ii) the new Stock Option does not give the
Grantee additional benefits, including any extension of the exercise
period.   Alternatively, the Committee may provide, that each
Stock Option and Stock Award granted under the Plan shall terminate as of a date
to be fixed by the Board; provided, that no
less than thirty days written notice of the date so fixed shall be given to each
holder, and each holder shall have the right, during the period of fifteen days
preceding such termination, to exercise the Stock Options and Stock Awards as to
all or any part of the Stock covered thereby, including Stock as to which such
would not otherwise be exercisable.

       

      2.           Adjustment
Provisions.

       

      (a)           In
the event that a dividend shall be declared upon the Stock payable in shares of
the Corporation's common stock, the number of shares of Stock then subject to
any Stock Option or Stock Award outstanding under the Plan and the number of
shares reserved for the grant of Stock Options or Stock Awards pursuant to the
Plan shall be adjusted by adding to each such share the number of shares which
would be distributable in respect thereof if such shares had been outstanding on
the date fixed for determining the shareholders of the Corporation entitled to
receive such share dividend.

       

      (b)           If
the shares of Stock outstanding are changed into or exchanged for a different
number or class or other securities of the Corporation or of another
corporation, whether through split-up, merger, consolidation, reorganization,
reclassification or  recapitalization then there shall be substituted
for each share of Stock subject to any such Stock Option or Stock Award and for
each share of Stock reserved for the grant of Stock Options or Stock Awards
pursuant to the

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      Plan the
number and kind of shares or other securities into which each outstanding share
of Stock shall have been so changed or for which each share shall have been
exchanged.

       

      (c)           In
the event there shall be any change, other than as specified above in this
Section 2, in the number or kind of outstanding shares of Stock or of any shares
or other securities into which such shares shall have been changed or for which
they shall have been exchanged, then if the Board shall, in its sole discretion,
determine that such change equitably requires an adjustment in the number or
kind of shares theretofore reserved for the grant of Stock Options or Stock
Awards pursuant to the Plan and of the shares then subject to Stock Options or
Stock Awards, such adjustment shall be made by the Board and shall be effective
and binding for all purposes of the Plan and of each Stock Option and Stock
Award outstanding thereunder.

       

      (d)           In
the case of any such substitution or adjustment as provided for in this Section
2, the option price set forth in each outstanding Stock Option for each share
covered thereby prior to such substitution or adjustment will be the option
price for all shares or other securities which shall have been substituted for
such share or to which such share shall have been adjusted pursuant to this
Section 2, and the price per share shall be adjusted accordingly.

       

      (e)           No
adjustment or substitution provided for in this Section 2 shall require the
Corporation to sell a fractional share, and the total substitution or adjustment
with respect to each outstanding Stock Option shall be limited
accordingly.

       

      (f)           Upon
any adjustment made pursuant to this Section 2 the Corporation will, upon
request, deliver to the Grantee a certificate setting forth the option price
thereafter in effect and the number and kind of shares or other securities
thereafter purchasable on the exercise of such Stock Option.

       

      3.           Dissolution or
Liquidation.  In the event of a proposed dissolution or
liquidation of the Corporation, to the extent an Award has not been previously
exercised, it will terminate immediately prior to the consummation of such
proposed action.

       

      4.           Change in
Control.  Notwithstanding Sections 1 and 2 above, in the event
of a Change of Control (as defined below), except as otherwise determined by the
Board, the Grantee shall fully vest in and have the right to exercise the Awards
as to all of the Stock, including Stock as to which it would not otherwise be
vested or exercisable.  If an Award becomes fully vested and
exercisable as the result of a Change of Control, the Committee shall notify the
Grantee in writing or electronically prior to the Change of Control that the
Award shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Award shall terminate upon the expiration
of such period.  For purposes of this Agreement, a “Change of Control”
means the happening of any of the following events:

       

      When any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”) (other than the
Corporation, a subsidiary or a Corporation employee benefit plan, including any
trustee of such plan acting as trustee) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing fifty percent (50%) or more of the
combined voting power of the Corporation’s then outstanding securities entitled
to vote

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      generally
in the election of directors; or

      

      The
stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the total voting power represented by
the voting securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Corporation approve an agreement for the sale or disposition by the Corporation
of all or substantially all the Corporation’s assets; or

      A change
in the composition of the Board of the Corporation, as a result of which less
than a majority of the directors are Incumbent Directors.  “Incumbent
Directors” shall mean directors who either (A) are directors of the
Corporation as of the date the Plan is approved by the stockholders, or
(B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Corporation).

      

       

      VII.
INDEMNIFICATION

       

      Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Corporation against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, notion,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan or
any Award agreement and against and from any and all amounts paid by him or her
in settlement thereof, with the Corporation’s approval, or paid by him or her in
settlement thereof, with the Corporation’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Corporation an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Corporation’s Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Corporation may have to indemnify them or hold them harmless.

       

       

      VIII.
CONDITIONS UPON ISSUANCE OF SHARES

       

      1.           Legal
Compliance.  Stock shall not be issued pursuant to the exercise
of an Award unless the exercise of such Award and the issuance and delivery of
Stock shall comply with applicable laws and shall be further subject to the
approval of counsel for the Corporation with respect to such
compliance.

       

       

      2.           Investment
Representations.  As a condition to the exercise of an Award,
the Corporation may require the Grantee exercising such Award to represent and
warrant at the time of any such exercise that the Stock is being purchased only
for investment and without any present intention to sell or distribute such
Stock if, in the opinion of counsel for the Corporation,

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      such a
representation is required.

       

       

      3.           No Rights as
Stockholder. No
Grantee will have any of the rights of a stockholder with respect to any Stock
until the Stock is issued to the said Grantee.  After Stock is issued
to the Grantee, the Grantee will be a stockholder and will have all the rights
of a stockholder with respect to such Stock, including the right to vote and
receive all dividends or other distributions made or paid with respect to such
Stock.

       

      

      X.  LEGAL
CONSTRUCTION

       

       

      1.           Gender and
Number.  Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

       

       

      2.           Severability.  In
the event any provision of the Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

       

       

      3.           Requirements of
Law.  The granting of Awards and the issuance of Stock under
the Plan shall be subject to all applicable laws.

       

       

      4.           Governing
Law.  The Plan and all Award agreements shall be construed in
accordance with and governed by the laws of the State of
California.

       

       

      5.           Captions.   Captions
are provided herein for convenience only, and shall not serve as a basis for
interpretation or construction of the Plan.

       

      

      [End of
Document]

       

       

      -12-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]