UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended February 28, 1999
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No fee required) for the transition period from
____ to ______.
Commission file number: 0-10201
Nugget Exploration, Inc.
(Name of Small Business Issuer in Its Charter)
Nevada 83-0250943
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2133 East 9400 south, Suite 151, Salt Lake City, Utah 84093
(Address of Principal Executive Offices)(Zip Code)
801-944-0701
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of Registrant's common stock ($0.01 par value)
as of June 16, 1999, was 679,117.
Total of Sequentially Numbered Pages: 27
Exhibit Index on Page: 7
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TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION....................................................................................4
ITEM 1. FINANCIAL STATEMENTS...................................................................4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OR PLAN OF OPERATION.............................................4
PART II - OTHER INFORMATION.......................................................................................4
ITEM 5. OTHER INFORMATION......................................................................4
Sale of Wyoming Property........................................................................4
Rescission of IMAI Acquisition..................................................................5
Ken Kurtz Consulting Agreement..................................................................6
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.......................................................6
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SIGNATURES........................................................................................................7
INDEX TO EXHIBITS.................................................................................................8
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Not applicable. The financial information required by Part I of Form
10-QSB is not required at this time pursuant to Exchange Act Regulations Rule
13a-13(c)(2). Such information is not required for mining companies not in the
production state but engaged primarily in the exploration for or the development
of mineral deposits other than oil, gas or coal, if all the following conditions
are met:
(i) The registrant has not been in production during the current fiscal
year or the two years immediately prior thereto; except that being in production
for an aggregate period of not more than eight months over the three-year period
shall not be in violation of this condition.
(ii) Receipts from the sale of mineral products or from the operations
of mineral producing properties by the registrant and its subsidiaries combined
have not exceeded $500,000 in any of the most recent six years and have not
aggregated more than $1,500,000 in the most recent six fiscal years.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OR PLAN OF OPERATION
Not applicable. See Part I, Item 1. "Financial Statements"
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
Sale of Wyoming Property
The Company has owned certain real property located in Fremont County,
Wyoming, and buildings and mining equipment located on such property for many
years (all such real and personal property shall hereinafter be referred to as
the "Wyoming Property"). For more information and a legal description of the
Wyoming Property, see Exhibit A hereto. The Company had been unable to obtain
the necessary funds to proceed with any exploration and mining activities on the
Wyoming Property to a level that would produce revenues and profits for the
Company. The Company had previously experienced opposition from various
environmental groups regarding future mining related activities on the Wyoming
Property. As a result, the Wyoming Property has not had any mining related
activity for an extended period of time and the Company did not anticipate
engaging in any mining related activities in the future.
The Company executed a Contract to Purchase Mining Property on November
18, 1998 ("Property Contract"), with ORA Management, L.L.C. (the "Buyer"), to
sell for Seven Hundred Thousand Dollars ($700,000) certain real property located
in Fremont County, Wyoming, as well as the buildings and mining equipment
located on such property (hereinafter referred to as the "Wyoming Property").
For more information and a legal description of the Wyoming Property, see
Attachment A to the Property Contract, which is attached hereto as Exhibit
10(iii) and incorporated herein by reference.
Pursuant to the Property Contract, the Buyer purchased the property,
subject to all liens and encumbrances, together with all equipment, houses and
other material, excluding any personal property belonging to the caretaker. The
Property Contract included, without limitation, the minerals, mining rights
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and other rights in the land as particularly described in a deed from Timbabah
Mining Company to the Company recorded July 13, 1981 in Book 162, Page 741 of
Deeds in the Office of the County Recorder of Fremont County, Wyoming. The
Property Contract did not include the surface grazing right which was granted to
Willowbrook Ranch Company by Timbabah Mining Company pursuant to an Order issued
by the District Court of Fremont County, Wyoming, Ninth Judicial District, Civil
Action Number 26862.
On February 15, 1999, the Company and Buyer executed an Extension of
Contract to Purchase Mining Property. Pursuant to this extension, the closing
date was extended to April 30, 1999 in exchange for an additional cash down
payment of Ten Thousand Dollars ($10,000). All other terms and conditions of the
Contract to Purchase Mining Property remained the same. On April 23, 1999, the
Company and Buyer executed a Second Extension of Contract to Purchase Mining
Property. Pursuant to this second extension, the closing date was extended to
May 24, 1999, in exchange for an additional cash down payment in the amount of
Four Hundred Fifty Thousand Dollars ($450,000) to be deposited in an escrow
account. One Hundred Thousand Dollars ($100,000) of this deposit was
non-refundable. The Thirty Five Thousand Dollars ($35,000) in down payment
already deposited in the escrow account was also made non-refundable. These
deposits accrued to the final purchase price of Seven Hundred Thousand Dollars
($700,000) which was paid at the time of closing on April 23, 1999.
On May 24, 1999, the Company received the purchase price of $700,000,
of which $648,810.82 constituted net proceeds to the Company. The Company has
agreed with six of its largest creditors to exchange these net proceeds in
varying proportions for the release and satisfaction of claims against the
Company totaling $2,032,433. The Company's Board of Directors and the holders of
a majority of the outstanding shares of the Company's Common Stock approved this
sale of the Wyoming Property and the settlement of such claims with the sale
proceeds. Such proceeds were in fact transferred to such creditors pursuant to
five Satisfaction and Releases, which are attached hereto as Exhibits 10(vi)
through 10(x).
Rescission of IMAI Acquisition
On December 9, 1998, the Company executed a Purchase and Sale Agreement
(the "Purchase Agreement") with Imaging Management Associates, Inc., a Colorado
corporation engaged in the business of operating diagnostic imaging centers
("IMAI"). The Purchase Agreement was disclosed and filed with the Commission on
Form 8-K on December 23, 1998. Pursuant to the Purchase Agreement, the Company
was to acquire two diagnostic imaging centers (the "Imaging Centers") subject to
the Company's review and independent approval of the audited financial
statements of IMAI's operations. Approval was contingent upon IMAI's audited
financial statements being substantially similar to the unaudited financial
statements which they provided to the Company in the early stages of
negotiation. The transaction was structured as an asset purchase whereby the
Company was to acquire all the assets related to and constituting the Imaging
Centers and assume certain liabilities as described in the Purchase Agreement.
In exchange for the Imaging Centers, the Company was to issue IMAI
1,250,000 shares of the Company's common stock, $.01 par value. In connection
with its expected acquisition of the Imaging Centers, the Company entered into
an Employment Agreement with Dr. Leonard Vernon who agreed to serve as President
of the Company. The Company granted Dr. Vernon an option to purchase 3,000,000
shares of Common Stock for $0.155 per share. Dr. Vernon exercised the option in
exchange for a Promissory Note and a Stock Pledge Agreement. Both the 1,250,000
share block constituting consideration for the Purchase and Sale Agreement and
the 3,000,000 shares to be received upon exercise of an option in the Employment
Agreement were authorized and issued by the Company's board of directors but
retained by the Company's board subject to completion of the IMAI acquisition,
which was rescinded on June 15, 1999.
IMAI notified the Company that it would not be providing audited
financial statements to the Company, partially because any such audited
statements would materially differ from the unaudited financial statements IMAI
thought were representative of its operations. Pursuant to a Rescission of
Agreements and Release of Claims dated June 15, 1999, which is attached hereto
as Exhibit 10(i) and incorporated herein by
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reference ("Rescission and Release"), both the Purchase Agreement and the
Employment Agreement were terminated and rescinded ab initio, as was Dr.
Vernon's stock option and corresponding Promissory Note and Stock Pledge
Agreement. In accordance with the Rescission and Release, the Company, IMAI and
Vernon agreed to effect the return and cancellation of any and all consideration
related thereto and hold one another harmless and indemnify one another with
respect to the obligations stemming from the Purchase and Sale Agreement, the
Employment Agreement, Promissory Note, and Stock Pledge Agreement.
Ken Kurtz Consulting Agreement
On November 30, 1998, the Company and Ken W. Kurtz ("Kurtz") entered a
Consulting Agreement ("November Consulting Agreement") whereby Kurtz agreed to
assist the Company by preparing employment agreements, contracts and other
filings required by the Commission as well as all other necessary State and
Federal regulatory bodies, locating independent auditor and attorney for the
Company. Kurtz received Four Hundred Thousand (400,000) shares of Client's
common stock in exchange for such services, which shares were registered on a
Form S-8 registration statement.
This November Consulting Agreement is separate and distinct from a
March 5, 1998 Financial Consulting Agreement by and between the Company and Park
Street Investments, Inc., a Utah corporation wholly owned by Kurtz ("Park
Street"). Pursuant to this agreement, Park Street agreed to assist the Company
with its administration and recapitalization and agreed to actively pursue and
negotiate a merger or business combination with a third party on behalf of the
Company. Park Street is responsible for the costs associated with these
responsibilities until the Company effects a business combination with another
entity. For more information on this March 5 agreement, see the Company's Form
8-K file don June 22, 1998 with the Securities and Exchange and incorporated
herein by reference. If a merger or business combination is achieved, the
Company anticipates having such third party take over full operation and
responsibility of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation
S-B are listed in the Index to Exhibits beginning on page 7 of this
Form 10-QSB, which is incorporated herein by reference.
(b) Reports on Form 8-K.
(ii) On October 19, 1998, the Company filed a report on Form 8-K
relating to the 1 for 310 reverse stock split.
(ii) On December 4, 1998, the Company filed a report on Form 8-K
relating to the resignation of one of the Company's directors.
(iii) On December 23, 1998, the Company filed a report on Form 8-K
relating to the Company's acquisition of two diagnostic
imaging centers located in Cherry Hill, New Jersey and
Wilmington, Delaware.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized this 18th day of June 1999.
Nugget Exploration, Inc.
/s/ Tyson Schiff
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Tyson Schiff, President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
/s/ Tyson Schiff President, Treasurer, June 18, 1999
Tyson Schiff Secretary and Director
/s/ Brian Ortega Director June 18, 1999
Brian Ortega
/s/ Marianne Brady Director June 18, 1999
Marianne Brady
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INDEX TO EXHIBITS
SEC Ref Page
No. No. Description
3(i) * Articles of Incorporation, including amendments,
incorporated herein by reference from the Company's previous
filings.
3(ii) * Bylaws of the Company, incorporated herein by reference from
the Company's previous filings.
10(i) 8 This Rescission of Agreements and Release of Claims is made
as of this 10th day of May 1999 between and among Nugget
Exploration, Inc., Imaging Management Associates, Inc., and
Dr. Leonard Vernon.
10(ii) 10 This Consulting Agreement is made effective this 30th day of
November, 1998 by and between the Company and Ken W. Kurtz.
10(iii) 13 Contract to Purchase Mining Property entered on November 18,
1998, by and between ORA Management, LLC, and the Company.
10(iv) 21 Extension of Contract to Purchase Mining Property by and
between ORA Management, L.L.C., and the Company, dated
February 15, 1999.
10(v) 22 Second Extension of Contract to Purchase Mining Property by
and between ORA Management, L.L.C., and the Company, dated
April 23, 1999.
10(vi) 23 Satisfaction and Release entered into April 30, 1999 between
and among the Company, Anne M. MacGuire and Mary C.
MacGuire.
10(vii) 24 Satisfaction and Release entered into April 30, 1999 by and
between the Company and Delores H. MacQueen.
10(viii) 25 Satisfaction and Release entered into May 5, 1999 by and
between the Company and Lubuau, Hand & Bailey, L.L.C.
10(ix) 26 Satisfaction and Release entered into May 11, 1999 by and
between the Company and Mary Alice Hand (Mrs. Dennis (Joe)
Hand).
10(x) 27 Satisfaction and Release entered into May 11, 1999 by and
between the Company and Robert Jerry Hand.
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RESCISSION OF AGREEMENTS
AND
RELEASE AND INDEMNIFICATION OF CLAIMS
THIS RESCISSION OF AGREEMENTS AND RELEASE OF CLAIMS ("Rescission and
Release") is made as of this 10th day of May 1999 between and among Nugget
Exploration, Inc. ("Nugget"), Imaging Management Associates, Inc. ("Imaging"),
and Dr. Leonard Vernon ("Vernon") (Nugget, Imaging and Vernon may be
collectively referred to as the "Parties"), for the purpose of rescinding a
variety of transactions related to a merger of Imaging and Nugget.
RECITALS
WHEREAS, effective December 9, 1998, Nugget and Imaging, which is owned
by Vernon, entered into a Purchase and Sale Agreement, which was related to an
Employment Agreement entered on November 30, 1998 by and between Nugget and
Vernon.
WHEREAS, pursuant to the Purchase and Sale Agreement, Nugget was to
acquire two operating imaging centers from Imaging in exchange for 1,250,000
restricted shares of Nugget common stock.
WHEREAS, pursuant to the Employment Agreement, Vernon was to become
employed by Nugget in exchange for a compensation package that included, among
other things, an option to purchase 3,000,000 restricted shares of Nugget common
stock, which option Vernon did exercise in exchange for a Promissory Note and
Stock Pledge Agreement to Nugget (the Purchase and Sale Agreement, the
Employment Agreement, the Promissory Note, and the Stock Pledge Agreement may be
collectively referred to as the "Agreements").
WHEREAS, Imaging and Nugget wish to mutually rescind the Agreements
because Imaging's audited financial statements, which are still unfinished, are
not expected to substantially reflect the unaudited statements Nugget was
provided during the negotiation of the Purchase and Sale Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein, and the recitals expressed
above, which are incorporated herein by this reference, and of the mutual
benefits to be derived herefrom, and intending to be legally bound, the Parties
hereto agree as follows:
1. Nugget, Imaging and Vernon hereby agree to immediately rescind and
terminate, ab initio, the Agreements. The Parties agree not to be bound by the
terms of the Agreements because material conditions have not been fulfilled and
the Parties have determined that the transactions are therefore not in their
best interests.
2. The Parties further agree to hold one another harmless, release any
and all claims against one another stemming from the Agreements and indemnify
one another with respect to any obligations arising pursuant to or from the
Agreements, including any and all out of pocket costs and expenses.
3. All shares issued or to be issued under the Agreements shall be
returned to the respective issuers of such shares. All Parties agree to waive
any interests in any shares that have not been issued or transferred.
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4. The officers and directors of Nugget immediately prior to the
Employment Agreement and Purchase and Sale Agreement shall be reinstated as the
officers and directors of Nugget effective upon mutual execution of this
Rescission and Release. The Rescission and Release contemplated herein is
complete upon signing of the Parties.
Nugget Exploration, Inc. Dr. Leonard Vernon
/s/ Tyson Schiff /s/ Dr. Leonard Vernon
Tyson Schiff, Director and former Dr. Leonard Vernon
President and Secretary
Imaging Management Associates, Inc.
/s/ Dr. Leonard Vernon
Dr. Leonard Vernon
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made effective this 30th day
of November, 1998 by and between, Ken W. Kurtz ("Consultant"), an individual
residing in Utah with offices located at 2133 E 9400 S Suite 151, Sandy, Utah
84093 and Nugget Exploration, Inc. ("Client"), a Nevada Corporation with offices
located at 815 South Durbin St. Casper, Wyoming 82601 with respect to the
following:
RECITALS
WHEREAS, Consultant is in the business of providing general business
consulting services to privately held and publicly held corporations; and
WHEREAS, Client desires to retain Consultant to assist Client with such
services.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Consultant
agree as follows:
1. Engagement of Consultant. Consultant agrees to use its best efforts to
assist Client:
a. In strategic planning, market research and in negotiating with
and hiring qualified professionals to assist the Company in
determining new markets and opportunities for the Company's
current and future products and services;
b. With various forms of document preparation including
preparation of employment agreements, contracts and securities
filings such as those needed by Client on Form 10-KSB, Form
10-QSB, and Form 8-K;
c. In preparing and filing other documents with the necessary
State and Federal regulatory bodies as is required by law;
d. In preparing the correspondences required by the NASD,
Depository Trust Corporation ("DTC"), CUSIP Bureau, Client's
Transfer Agent;
e. In identifying professionals to assist the Company in
preparing financial statements and obtaining an audit on the
financial statements in accordance with U.S. GAAP standards by
an accounting firm with SEC peer review;
f. In finding an attorney to provide any necessary legal
assistance and opinions as required or if requested;
g. In the preparation of corporate resolutions, and other
correspondences necessary to fulfill its obligations under
this Agreement, including Board and shareholder resolutions.
All of the foregoing services collectively are referred to herein as
the "Consulting Services."
2. Compensation. Client shall compensate Consultant as follows for
consulting services ("Consulting Services") to be rendered pursuant to
this Agreement which Client acknowledges consultant as having already
substantially performed:
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a. Consultant shall issue to Client, four hundred thousand
(400,000) shares of Client's common stock.
b. All shares issued to Consultant pursuant to this Agreement
shall be free-trading and registered on a Form S-8
registration statement which Client undertakes to file
immediately upon execution of this Agreement. Client further
agrees to file a post-effective amendment with a resale
prospectus as is deemed necessary by counsel.
3. Term of Agreement, Extensions and Renewals.
a. This Agreement shall be in effect for a period of one year
from the date herein. This Agreement may be extended on a
month to monthbasis (the "Extension Period") by mutual
agreement of the parties executed in writing specifying the
compensation for the Extension Period.
b. In the event of early termination, Client shall be obligated
for any amounts due under this agreement. Such notice of
either extension or termination shall be in writing and shall
be delivered via U.S. certified mail, when applicable,
effective ten (10) days after delivery to the other.
4. Expenses. Each party shall be responsible for its own expenses for the
Consulting Services herein.
5. Due Diligence. Client shall supply and deliver to Consultant all
information as may be reasonably requested by Consultant to enable
Consultant to make an investigation of the Client and its business
prospects, and they shall make available to Consultant names,
addresses, and telephone numbers as Consultant may need to verify or
substantiate any such information provided.
6. Best Efforts Basis. Consultant agrees that it will at all times, to the
best of its experience, ability and talents, perform all the duties
that may be required of and from Consultant pursuant to the terms of
this Agreement. Consultant does not guarantee that its efforts will
have any impact on the Clients' business or that any subsequent
financial improvement will result from Consultants' efforts.
7. Independent Legal and Financial Advice. Consultant is not a law firm;
neither is it an accounting firm. Consultant does, however, retain
professionals in those capacities to better enable Consultant to
provide consulting services. Client represent that they have not nor
will they construe any of the Consultants' representations to be
statements of law. Client has and will continue to seek the independent
advice of legal and financial counsel regarding all material aspects of
the transactions contemplated by this Agreement, including the review
of all documents provided by Consultant to Client and all opportunities
Consultant introduces to Client.
8. Miscellaneous.
a. The execution and performance of this Agreement has been duly
authorized by all requisite individual or corporate actions
and approvals and is free of conflict or violation of any
other individual or corporate actions and approvals entered
into jointly and severally by the parties hereto. This
Agreement represents the entire Agreement between the parties
hereto, and supersedes any prior agreements with regards to
the subject matter hereof. This Agreement may be executed in
any number of facsimile
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counterparts with the aggregate of the counterparts together
constituting one and the same instrument. This Agreement
constitutes a valid and binding obligation of the parties
hereto and their successors, heirs and assigns and may only be
assigned or amended by written consent from the other party.
b. No term of this Agreement shall be considered waived and no
breach excused by either party unless made in writing. In the
event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of
this Agreement, and this Agreement shall be constructed as if
it never contained any such invalid, illegal or unenforceable
provisions. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement. From time to time,
each party will execute additional instruments and take such
action as may be reasonably requested by the other party to
confirm or perfect title to any property transferred hereunder
or otherwise to carry out the intent and purposes of this
Agreement.
c. The validity, interpretation, and performance of this
Agreement shall be controlled by binding arbitration in the
State of Wyoming under the rules then obtaining of the
American Arbitration Association. Such arbitration ruling
shall be final and binding amongst the parties herein. If any
action is brought to enforce or interpret the provisions of
this agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees, court costs, and other
costs incurred in proceeding with the action from the other
party.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.
Nugget Exploration, Inc.
/s/ Tyson Schiff /s/ Ken W. Kurtz
Tyson Schiff, President Ken W. Kurtz
CONTRACT TO PURCHASE MINING PROPERTY
This agreement is entered into on this 18th day of November 1998,
between ORA Management, LLC of 2706 Ankeny Way, Rock Springs, Sweetwater County,
Wyoming, referred to as buyer, and Nugget Exploration, Inc. and or assigns of
815 South Durbin, Casper, Natrona County, Wyoming, a Nevada Corporation referred
to as seller.
SECTION ONE
RECITALS
1. Seller is the owner of certain real property located and
described in Attachment A, Fremont County, Wyoming. This property is referred to
as the property. A map of the property is attached as Attachment B and
incorporated herein by reference.
2. Certain buildings and mining equipment are included with the
property.
3. Buyer desires to purchase and seller desires to sell the property,
together with all equipment, houses and other material, excluding any personal
property belonging to the caretaker. Caretaker (if he is living on the property
at the time of sale) shall be given written notice to vacate by the Buyer.
Caretaker shall have thirty (30) days to vacate the property after receipt of
written notice to vacate from the Buyer.
SECTION TWO
AGREEMENT
In consideration of the mutual covenants contained in this agreement
and other and further consideration, the receipt and sufficiency of which is
acknowledged, seller agrees to sell to buyer, and buyer agrees to purchase from
seller, the property, subject to all liens and encumbrances of record as shown
on Attachment A which is attached and incorporated by reference, together with
the buildings and equipment located on the property for the following price and
on the following terms and conditions:
1. Purchase Price. The purchase price shall be the sum of Six Hundred
and Fifty Thousand Dollars ($650,000.00) allocated as follows:
2. Prior to close of escrow, buyer shall pay to seller a cash down
payment of Five Thousand Dollars ($5,000.00) which shall be held by Teton
Shadows Realty in their escrow account until the time of closing. This deposit
shall be deemed non-refundable 30 calendar days after this contract is signed by
the buyer. The unpaid balance of the purchase price, Six Hundred and Forty Five
Thousand Dollars ($645,000.00) shall be paid at the time of closing.
3. This agreement includes, without limitation, the minerals; mining
rights and other rights in the land as are particularly described in a deed from
Timbabah Mining Company to Nugget Exploration Company Inc. recordedJuly 13, 1981
[in Book 162 of Deeds, at page 741, in the office of the County Recorder of
Fremont County]. Seller does not warranty that this property can be used for any
particular purpose. The Seller will transfer all rights that it has in the
property to the Buyer at the time of closing.
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4. The purchase price of the land is Six Hundred and Fifty Thousand
Dollars in immediately available funds, payable in full on execution and
delivery of a deed to the land by seller as provided in this agreement.
5. At the request of buyer, which request may be made at such time as
buyer may deem appropriate, but not later than January 4, 1999, seller shall
execute and deliver a deed conveying to buyer in fee simple, all minerals,
mining rights and other rights of seller in and to the land, free from all liens
and encumbrances, excepting the Willowbrook Ranch grazing right. Taxes will be
prorated as of the date of closing.
6. If Seller cannot convey marketable title to the land to buyer by
January 4, 1999, buyer may cancel this agreement. However, buyer may extend the
time limit for any reasonable time required to permit the perfecting of the
title.
7. The sale of this property does not include the surface grazing right
granted to Willowbrook Ranch Company by Timbabah Mining Company. Buyer
understands that the use of this property is subject to the surface grazing
right. Buyer has seen a copy of the ORDER issued by District Court of Fremont
County, Wyoming, Ninth Judicial District, Civil Action No. 26862 regarding this
surface grazing right and the Conclusion by the Supreme Court of Wyoming that
the District Court did not err when it granted in favor of Nugget Exploration,
Inc. reserving all minerals and mineral rights in the property itself to Nugget
Exploration Inc.
8. Escrow. Within three (3) days after the execution of this agreement,
buyer and seller will open an escrow for this transaction at the office of The
County Title Agency, located at 113 North Fifth Street East, Riverton, Fremont
County, Wyoming. The escrow will close on January 4, 1999, unless extended by
mutual agreement of buyer and seller.
SECTION THREE
TITLE
Title to property to be conveyed by seller shall be good, clear of all
liens and encumbrances, except: The Willow Brook Ranch company owns a surface
grazing right to the property. Nugget Exploration, Inc. will deliver title to
the property as Nugget Exploration, Inc. holds it at the time of closing.
Title as required by this agreement shall be evidenced by a standard
form of Policy Insurance issued by the County Title Insurance Company, doing
business in Fremont County, where the property is situated. The policy shall be
issued as of the date of closing, shall be in the amount of the purchase price,
and shall be a joint owner-mortgagee policy insuring Seller and Buyer as their
interests may appear.
Seller shall convey title at the closing of the transaction to ORA
Management, LLC, 2706 Ankeny Way, Rock Springs, Sweetwater County, Wyoming.
SECTION FOUR
COSTS
The following costs shall be borne equally by the parties: closing fee
of the title agency
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The following costs [not to exceed $2,500.00] shall be paid by seller:
title insurance premium, drafting the Deed and charges of seller's attorney for
drawing instruments and advising.
The following costs shall be paid by purchaser: the cost of procuring
financing and charges of purchaser's attorney for drawing instruments and
advising.
Fremont County property tax shall be prorated to the date of closing.
SECTION FIVE
INSURANCE
Risk of loss or damage to property by fire, storm, burglary, vandalism,
or other casualty, between the date of this agreement and the closing, shall be
and is assumed by purchaser. No such loss or damage shall void or impair this
agreement. If the improvements or personal property, or both, are damaged or
destroyed, in whole or in part, by casualty prior to closing, the agreement
shall continue in full force and effect, and purchaser shall be subrogated to
seller's right of coverage with respect to any insurance carried by seller. If
the contract is terminated before the closing date, the Buyer shall not bear any
responsibility for any losses.
SECTION SIX
TRANSFER OF PROPERTY
Seller shall maintain the property, including improvements and the
personal property described above, in its present condition pending the closing
of this transaction, normal and reasonable wear excepted.
Possession of property shall be transferred to purchaser immediately
after the closing of the sale.
SECTION SEVEN
TIME OF ESSENCE, CLOSING
Time is expressly declared to be of the essence of this agreement. The
agreement shall be executed and completed, and sale closed, on or before January
4, 1999 or such other date as the parties may in writing agree. Each party shall
fully perform all the party's obligations under this agreement at such times as
to insure that the closing takes place within the period specified, or any
agreed-on extension of that period. Seller shall grant an extension to January
31, 1999 if needed.
SECTION EIGHT
REMEDIES OF PARTIES
If purchaser fails or refuses to comply with the conditions assumed by
purchaser, or to perform all of purchaser's obligations under this agreement,
seller may at seller's option: (a) hold and retain the initial deposit money and
any additional funds paid or deposited by purchaser, as liquidated damages for
breach of this agreement, and rescind and terminate the agreement, whereupon all
rights and obligations
<PAGE>
under the agreement shall cease; or (b) enforce this agreement by appropriate
action, including an action for specific performance, or for damages for breach,
and retain all moneys paid or deposited by purchaser pending the determination
of the action. Seller shall give buyer written notice of election with respect
to seller's exercise of either of these options.
If seller fails or refuses to perform seller's obligations under this
agreement, including the furnishing of good title and transfer of possession,
purchaser may rescind the agreement and recover all deposits paid by purchaser.
Seller's Damages: Buyer and seller agree that it is not now possible to
anticipate the amount of damages that may be incurred by seller should buyer be
unwilling or unable to complete this agreement. Both parties agree that it would
be impracticable and extremely difficult to fix the actual damages. The property
is land on which considerable rezoning, surveying, and other miscellaneous
improvements are anticipated to occur in the near or immediate future.
For this reason the parties to this agreement agree that, as the sole
remedy of seller for buyer's breach of this agreement, seller shall be entitled
to the sum of Five Thousand Dollars ($5,000.00) as liquidated damages.
Buyer's Damages: Damages for breach of this agreement: buyer and seller
agree that it is not now possible to anticipate the amount of damages. Should
seller, be unable to convey title to the property buyer shall be entitled to the
return of the deposit of Five Thousand Dollars ($5,000.00).
SECTION NINE
ASSIGNMENT; MODIFICATION, ENTIRE AGREEMENT OF PARTIES EXPRESSED
No right or interest of purchaser under this agreement shall be
assigned without the prior written consent of seller, which consent shall not be
unreasonably withheld.
Buyer's Nominee. Buyer has the one-time right to select one or more nominees to
take title to the property, without first obtaining seller's consent. However,
after this one selection, neither buyer nor its nominee or nominees may
designate any other nominee or nominees for all or any part of the property
without first obtaining the written consent of seller.
Seller has the right to assign this contract to any party without the
Buyers consent.
No modification of this agreement shall be valid or binding unless the
modification is in writing, duly dated and signed by both parties.
This instrument constitutes the entire agreement between the parties.
Neither party shall be bound by any terms, conditions, statements, or
representations, oral or written, not contained in this agreement. Each party
hereby acknowledges that in executing this agreement the party has not been
induced, persuaded, or motivated by any promise or representation made by the
other party, unless expressly set forth in this agreement. All previous
negotiations, statements, and preliminary instruments by the parties or their
representatives are merged in this instrument.
SECTION TEN
<PAGE>
MISCELANEOUS
A. The parties agree to execute and deliver such other and further
documents, including standard form escrow instructions not inconsistent with the
terms and provisions of this agreement, as may be deemed necessary or proper to
consummate this agreement. Seller further agrees to execute and deliver to buyer
assignments and conveyances of any and all rights, title, and interest in and to
the property or any personal property owned by seller located on or in the
property.
B. By acceptance of this offer, seller warrants that seller has not
received, nor is seller aware of, any notification from the department of
building and safety, the health department, or such other city, county, or state
authority having jurisdiction requiring any work to be done on the property.
Seller further warrants that in the event any such notice or notices are
received by seller prior to the close of escrow and seller is unable to or does
not elect to perform the work required in the notice at seller's sole cost and
expense on or before the close of escrow, the notices shall be submitted to
buyer for buyer's examination and written approval. Should buyer fail to approve
the notice and elect not to acquire the property subject to the effect of same,
within thirty (30) days from the date seller submits the notice to buyer, then
this agreement shall be canceled without liability to either party, and buyer's
earnest money deposit will be refunded.
C. This agreement supersedes any and all agreements between the parties
regarding the property that are prior in time to this agreement.
D. Time is of the essence of this agreement.
G. This agreement shall not be construed against the party preparing
it, but shall be construed as if both parties prepared it.
SECTION ELEVEN
SIGNATURE AND EFFECTIVE DATE
This instrument shall not be effective as an agreement until duly
signed by both parties. The date of execution and the effective date of the
agreement is the date first above set forth. The date of signature by each party
is the date set forth unless otherwise indicated after the party's signature.
In witness whereof, the parties have executed this instrument, in
duplicate, on the day and year first above written.
ORA Management LLC /s/ Mary MacGuire
Buyer Seller
Owner Nugget Exploration, Inc.
Title Title
December 9, 1998 November 29, 1998
Date Date
<PAGE>
ATTACHMENT A
Legal description for the property owned by Nugget Exploration, Fremont
County, Wyoming
Property Locattion: 64 Rock Creek Road
T29 R99 S17:Elizabeth Placer Mining Claim described as the S2SW4;
S20:NE4NW4, NW4NE4NW4 S7 :Atlantic City Placer Mining Claim
described as the
S25W4
S18:Rock Creek Placer Mining Claim described as the
E2SF4NW4, SW4NE4, N2SE4, N2NE4SE4
S27:Jacquermart Placer Mining Claim described as the
NW4SW4
S28:SE4NE4, N2SE4
S20:Matchless Placer Mining Claim described as the
S2NE4NE4, SE4NE4, N2NE4SE4
S21:S2SW4NW4, NW4SW4, W2NE4SW4
S28:Emile and Heloise Placer Mining Claim described as the
E2NW4, W2NE4
S21:Juncker Placer Mining Claim described as the S2SW4,
SW4SE4, S2NW4SE4, E2NE4SW4
S7 :Big Deposit Placer Minng Claim described as the SE4;
For a total of 1250 acres
Property Location: Great Basin (Lewiston property)
T28 R98 Sections 4 and 5
Further described as the following Lode mining claims:
Dexter-11.28 acres
Persimmon-13.043 acres
Wild Tiger-13.724 acres
Montezuma-13.128 acres
Aztec-20.098 acres
Beaver-12.845 acres
Elizabeth-17.735 acres
Essex-20.567 acres
Mammoth-14.124 acres
North Pole-20.662 acres
Anaconda-20.662 acres
Buffalo-16.608 acres
T29 R98 Sections 33 and 34
Arkansas-20.394 acres
Iron Duke-20.662 acres
Deer-19.620 acres
Black Ranger-20.662 acres
Moose-4.504 acres
Steamboat-20.662 acres
Antelope-20.382 acres
For a total of 321.285 acres.
<PAGE>
T29 R100 S12 S 13 NENENE, NENWNENE (52.2 acres): NEW YORK &
PENNSYLVANIA LODE MINING CLAIMS: DESIGNATED BY THE SURVEYOR GENERAL AS LOT #246
EMBRACING A PORTION OF S6 T29 R99 T29 R100 CONT 39.606 ACRES: THE BLANCH MAY &
AGUSTA C LODE MINING CLAIMS DESIGNATED BY THE SURVEYOR GENERAL AS LOT #246
EMBRACING A PORTION OF S6 T29 R99 & S1 T29 R100 CONT 39.945 ACRES; MARS & MARS
JR, PENZANCE LODE MINING CLAIMS DESIGNATED BY THE SURVEYOR GENERAL AS SURVEY
#240 EMBRACING A PORTION OF SEC'S 15, 16, 21, T29 R100 CONT 40.241 ACRES W J
BRYAN LODE MINING CLAIM DESIGNATED BY THE SURVEYOR GENERAL AS LOT #169 EMBRACING
A PORTION OF S2 T29 R100 CONT 661 ACRES M/L TOTALING 140.633 ACRES.
APPROXIMATE TOTAL NUMBER OF ACRES IS 1711.918
/s/ MCM /s/ MCM 12/18/98
SELLERS INITIALS SELLERS INITIALS DATE
/s/ ZIP /s/ ZIP 12-9-98
BUYERS INITIALS BUYERS INITIALS DATE
EXTENSION OF CONTRACT TO PURCHASE MINING PROPERTY
This is an agreement to Amend/Extend that Contract to Buy and Sell Real Estate
dated November 18, l998 between ORA Management, L.L.C. (referred to herein as
Buyer) and Nugget Exploration, Inc. (referred to herein as seller) (a copy of
which is attached hereto and incorporated by this reference into the body of
this document as if fully set forth herein) pertaining to the property described
as 1711.98 Acres Described Under Attachment "A" in Fremont County, Wyoming.
A. EXTENSIONS AND AMENDMENTS
All dates set forth in that Contract to Buy and Sell Real estate shall remain
the same except:
Closing may be extended to April 30, l999 with the following conditions:
That an additional cash down payment of Ten Thousand Dollars ($10,000.00) shall
be deposited to the escrow account held by Sothebys International Realty for
each calendar month that occurs before closing. That is, there shall be a
deposit of Ten Thousand Dollars ($10,000.00) for the month of February made by
Tuesday February 23, 1999, a like deposit for the month of March made by
Wednesday, March 10, l999 and a like deposit for the month of April made by
Monday April 12, l999. These deposits shall be nonrefundable, but will, along
with the original escrow deposit of $5,000.00 (Five Thousand Dollars), accrue to
the purchase price of Seven Hundred Thousand Dollars ($700,000.00) which shall
be paid at the time of closing.
All other terms and conditions of that Contract to Buy and Sell Real Estate
shall remain the same.
This agreement has been executed in multiple copies and my signature
acknowledges my consent and agreement to the terms hereof and that I received a
signed copy at the time of signing.
All representations made in the negotiations of this sale have been incorporated
herein. There are no verbal agreements between Buyer and Seller and or any
Broker to modify terms and conditions.
/s/ ORA Management, L.L.C. 2/15/99
Buyer ORA Management, L.L.C. Date
/s/ Brad Hyde
By: Brad Hyde
/s/ Nugget Exploration, Inc. 2/15/99
Seller Nugget Exploration, Inc. Date
/s/ Mary C. MacGuire
By: Mary C. MacGuire
SECOND EXTENSION OF CONTRACT TO PURCHASE MINING PROPERTY
This is an agreement to Amend/Extend that Contract to Buy and Sell Real Estate
dated November 18, l998 between ORA Management, L.L.C. (referred to herein as
Buyer) and Nugget Exploration, Inc. (referred to herein as seller) (a copy of
which is attached hereto and incorporated by this reference into the body of
this document as if fully set forth herein) pertaining to the property described
as 1711.98 Acres Described Under Attachment "A" in Fremont County, Wyoming.
A. EXTENSIONS AND AMENDMENTS
All dates set forth in that Contract to Buy and Sell Real estate shall remain
the same except:
Closing may be extended to, but not beyond, May 24, l999 with the following
conditions:
FIRST: That an additional cash down payment of Four Hundred Fifty Thousand
Dollars ($450,000.00) shall be deposited to escrow account # _________held by
The Hilltop National Bank, Casper, Wyoming for Nugget Exploration, Inc. One
Hundred Thousand Dollars ($100,000.00) of this deposit shall be nonrefundable.
Thirty Five Thousand Dollars ($35,000.00) downpayment already deposited to the
escrow account held by Sothebys International Realty is also nonrefundable.
These deposits will accrue to the purchase price of Seven Hundred Thousand
Dollars ($700,000.00) which shall be paid at the time of closing.
SECOND: If Buyer does not close by midnight, May 24, l999, Three hundred Fifty
Thousand Dollars ($350,000) will be returned to him by wire transfer and the
contract for sale is void.
All other terms and conditions of that Contract to Buy and Sell Real Estate
shall remain the same.
This agreement has been executed in multiple copies and my signature
acknowledges my consent and agreement to the terms hereof and that I received a
signed copy at the time of signing.
All representations made in the negotiations of this sale have been incorporated
herein. There are no verbal agreements between Buyer and Seller and or any
Broker to modify terms and conditions.
/s/ ORA Management, L.L.C. 4/23/99
Buyer ORA Management, L.L.C. Date
/s/ Brad Hyde
By: Brad Hyde
/s/ Nugget Exploration, Inc. 4/23/99
Seller Nugget Exploration, Inc. Date
/s/ Mary C. MacGuire
By: Mary C. MacGuire
SATISFACTION AND RELEASE
Upon receipt of the payment of one half (1/2) of the proceeds from the sale of
the Rock Creek and Lewiston properties owned by Nugget Exploration, Inc. in
Fremont County, Wyoming after all commissions, fees, taxes, closing costs and
attorney fees due to Robert Jerry Hand, Mary Alice Hand (Mrs. Dennis (Joe) Hand)
and Lubnau Hand and Bailey are paid, the undersigned hereby agrees and
acknowledges that any and all debts, obligations and liabilities owing to the
undersigned by Nugget Exploration, Inc., as of the dated hereof, including, but
not by way of limitation, certain promissory notes and accrued liabilities as
listed below with accrued interest, are paid in full, and the undersigned hereby
waives and forever releases any claim that the undersigned may have against
Nugget Exploration, Inc., in respect to such debts, obligations, and liabilities
as of the date of receipt of the payment:
By Nugget Exploration, Inc. to Anne M. MacGuire
11/27/95 $ 1,200.00
By Nugget Exploration, Inc. to Mary C. MacGuire
Note Payable 5/31/84 $155,203.00
Accounts Payable $ 65,285.14
Accrued Payroll $651,389.00
By Nugget Exploration, Inc. to Natrona Service, Inc. (Wholly Owned by Mary C.
MacGuire)
3/07/91 $ 34,165.85
Dated this 30 day of April, 1999.
/s/ Anne M. MacGuire
Anne M. MacGuire
/s/ Mary C. MacGuire
Mary C. MacGuire, personally and on behalf of
Natrona Service, Inc.
SATISFACTION AND RELEASE
Upon receipt of the payment of one half (1/2) of the proceeds from the sale of
the Rock Creek and Lewiston properties owned by Nugget Exploration, Inc. in
Fremont County, Wyoming after all commissions, fees, taxes, closing costs and
attorney fees due to Robert Jerry Hand, Mary Alice Hand (Mrs. Dennis (Joe) Hand)
and Lubnau Hand and Bailey are paid, the undersigned hereby agrees and
acknowledges that any and all debts, obligations and liabilities owing to the
undersigned by Nugget Exploration, Inc., John W. MacGuire or his Estate and/or
Mary C. MacGuire, personally, as of the dated hereof, including, but not by way
of limitation, certain promissory notes and accrued liabilities as listed below
with accrued interest, are paid in full, and the undersigned hereby waives and
forever releases any claim that the undersigned may have against Nugget
Exploration, Inc., John W. MacGuire or his Estate and/or Mary C. MacGuire, in
respect to such debts, obligations, and liabilities as of the date of receipt of
the payment:
By Nugget Exploration, Inc. to Delores H. MacQueen and/or the Estate of Donald
A. MacQueen
Note Dated 5/31/85 $ 13,063.00
Note Dated 5/31/86 $ 69,253.56
Note Dated 5/29/87 $ 19,730.00
Note Dated 3/7/91 $ 238,849.21
Note Dated 5/31/91 $ 59,860.09
Note Dated 8/16/91 $ 19,214.97
Note Dated 11/31/95 $ 14,102.00
By John W. MacGuire or his Estate and/or Mary C. MacGuire to Delores H. MacQueen
and/or the Estate of Donald A. MacQueen
Note Payable $ 40,000.00
Dated this 30 Day of April, 1999.
/s/ Delores H. MacQueen
Delores H. MacQueen
SATISFACTION AND RELEASE
Upon receipt of the payment of $12,631.98, the undersigned hereby agrees and
acknowledges that any and all debts, obligations, and liabilities owing to the
undersigned by Nugget Exploration, Inc., John MacGuire and/or Mary C. MacGuire,
personally, as of the date hereof, including, but not by way of limitation,
certain promissory notes and accrued liabilities as listed below with accrued
interest, are paid in full, and the undersigned hereby waives and forever
releases any claim that the undersigned may have against Nugget Exploration,
Inc., John MacGuire and/or Mary C. MacGuire, in respect of such debts,
obligations, and liabilities as of the date of receipt of the payment:
By Nugget Exploration, Inc. to Lubnau, Hand & Bailey, L.L.C.
Account payable $ 12,631.98
Dated this 5th day of May, 1999.
Lubuau, Hand & Bailey, L.L.C.
By: /s/ Daniel B. Bailey
Lubuau, Hand & Bailey, L.L.C.
Authorized Officer
Daniel B. Bailey, Member
SATISFACTION AND RELEASE
Upon receipt of the payment of $36,938.56, the undersigned hereby agrees and
acknowledges that any and all debts, obligations, and liabilities owing to the
undersigned by Nugget Exploration, Inc., John MacGuire and/or Mary C. MacGuire,
personally, as of the date hereof, including, but not by way of limitation,
certain promissory notes and accrued liabilities as listed below with accrued
interest, are paid in full, and the undersigned hereby waives and forever
releases any claim that the undersigned may have against Nugget Exploration,
Inc., John MacGuire and/or Mary C. MacGuire, in respect of such debts,
obligations, and liabilities as of the date of receipt of the payment:
By Nugget Exploration, Inc. to Mary Alice Hand (Mrs. Dennis (Joe) Hand)
Note Dated 7/23/91 one half (1/2) of $3,120.10 that is $1,560.05 Note
Dated 8/15/91 one half (1/2) of $19,214.97 that is $9,607.49 Account
payable one half (1/2) of $51,542.05 that is $25,771.02
Dated this 11 day of May, 1999.
/s/ Mary Alice Hand
Mary Alice Hand (Mrs. Dennis (Joe) Hand)
SATISFACTION AND RELEASE
Upon receipt of the payment of $36,938.56, the undersigned hereby agrees and
acknowledges that any and all debts, obligations, and liabilities owing to the
undersigned by Nugget Exploration, Inc., John MacGuire and/or Mary C. MacGuire,
personally, as of the date hereof, including, but not by way of limitation,
certain promissory notes and accrued liabilities as listed below with accrued
interest, are paid in full, and the undersigned hereby waives and forever
releases any claim that the undersigned may have against Nugget Exploration,
Inc., John MacGuire and/or Mary C. MacGuire, in respect of such debts,
obligations, and liabilities as of the date of receipt of the payment:
By Nugget Exploration, Inc. to Robert Jerry Hand
Note Dated 7/23/91 one half (1/2) of $3,120.10 that is $1,560.05 Note
Dated 8/15/91 one half (1/2) of $19,214.97 that is $9,607.48 Account
payable one half (1/2) of $51,542.05 that is $25,771.03
Dated this 11th day of May, 1999.
/s/ Robert Jerry Hand
Robert Jerry Hand
