Exhibit 10.258
SALE AGREEMENT
BY THIS AGREEMENT made this 18th day of April, 2002, MEGO FINANCIAL CORP.,
a New York corporation ("MEGO") having an address of 0000 Xxxxxxxx Xxxx, Xxx
Xxxxx, Xxxxxx 00000, XXXXX X. XXXXXXX and XXXX X. XXXXXXX (the "Mardians"),
having an address of 0000 X. Xxxxxxx Xxxx., XXX 000, Xxx Xxxxx, Xxxxxx 00000,
ATLANTIC DEVELOPMENT CORPORATION, a Nevada corporation ("AD"), having an address
of 0000 X. Xxxxxxx Xxxx., XXX 000, Xxx Xxxxx, Xxxxxx 00000, state, confirm and
agree as follows:
1. Recitals.
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1.1 Purchase of One Acre Lots.
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1.1.1 The Mardians are the sole shareholders of AD.
1.1.2 AD owns, as its sole assets, 1,510 duly platted, one acre,
approximate, lots known as Xxxxx 0, 0 xxx 0 xx Xxxx Xxxx Xxxxxxx and 509 duly
platted one acre, approximate, lots known as Sunny Lake Ranchos Unit 1, each
more particularly described on Exhibit "A" attached hereto (collectively, the
"One Acre Lots").
1.1.3 The One Acre Lots in Xxxx 0 xx Xxxx Xxxx Xxxxxxx and the Sunny
Lake Ranchos Unit 1 One Acre Lots do not have permanent, insurable, legal access
("Access") as required by the Arizona Department of Real Estate ("ADRE") for
registration thereof and the issuance of a Public Report necessary for the sale
thereof to the general public pursuant to, and in compliance with local, state
and federal law including the Interstate Land Sales Full Disclosure Act (a
"Public Report"). For the purposes hereof, the term "Public Report" shall mean a
Public Report in form and content satisfactory to MEGO, in MEGO's reasonable
discretion.
1.1.4 Lake Xxxx Ranchos Units 5 and 7 have Access and AD, through
Preferred Equities Corporation, a Nevada corporation ("PEC"), is in the process
of registering these One Acre Lots and securing Public Reports.
1.1.5 The Mardians are in the process of obtaining Access for Lake Xxxx
Ranchos Unit 6 One Acre Lots and the Sunny Lakes Ranchos Unit 1 One Acre Lots.
Upon obtaining Access, MEGO will apply for Public Reports for such One Acre
Lots.
1.1.6 MEGO desires to acquire the One Acre Lots by acquisition of all issued
and outstanding stock of AD ("AD Stock") on the terms and conditions set forth
herein.
2. Purchase of AD Stock.
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2.1 On and subject to the terms and conditions set forth herein, MEGO
agrees to acquire, through an exchange of stock pursuant to the terms and
conditions of this Agreement and Mardians agree to sell, through an exchange of
stock pursuant to the terms and conditions of this Agreement all right, title
and interest in the One Acre Lots.
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2.2 The purchase price for the AD Stock shall be paid by delivery to
the Shareholders of shares of MEGO Stock ("MEGO Stock") at a value of $6.00 per
share as follows :
(i) For those One Acre Lots in Lake Xxxx Ranchos Units 5 and 7
which currently have Access, a total of 169,800 shares of MEGO Stock restricted
as set forth below.
(ii) For the Xxx Xxxx Xxxx xx Xxxx Xxxx Xxxxxx Xxxx 0 and Sunny
Lake Ranchos Unit 1, a total of 370,616 shares of Mego Stock restricted as set
forth below.
If, however, shares of MEGO Stock are not traded at $6.00 or more for ten
(10) consecutive days during which the MEGO Stock is traded within 24 months
after the Stock Closing, MEGO will issue additional MEGO Stock to the Mardians
in an amount determined by the market value of MEGO's common stock at the
closing of NASDAQ trading on the day prior to the Stock Closing divided into
$3,242,496 minus 540,416.
2.3 (a) The MEGO Stock issued pursuant to Section 2.2(i) above shall
be subject to the following restrictions:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, ( THE "ACT") AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE DISPOSED OF UNLESS AND UNTIL
REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THE
HOLDER OF THESE SHARES IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER, THAT SUCH OFFER, SALE, TRANSFER OR OTHER DISPOSITION IS
EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE
ACT AND SUCH LAWS.
(b) The Mego Stock issued pursuant to Section 2.2(ii) above shall
be restricted as shown in Section 2.3(a) above and as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED
PURSUANT TO THE TERMS AND CONDITIONS OF THAT CERTAIN SALE
AGREEMENT DATED April 18, 2002. A COPY OF THE AGREEMENT MAY BE
OBTAINED FROM THE SECRETARY OF THE ISSUER.
The foregoing legend in this Section 2.3(b) shall be removed from
time to time when the Mardians have provided Access to one or more Xxx Xxxx Xxxx
xx Xxxx Xxxx Xxxxxxx Xxxx 0 and Sunny Lake Ranchos Unit 1 over a route
satisfactory to MEGO. For each One Acre Lot in Ranchos Xxxx 0 xxx Xxxxx Xxxx
Xxxxxxx Xxxx 0 for which Access is obtained, 411 shares of Mego Stock shall be
released from the restriction set forth in this Section 2.3(b) with the balance
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of the shares to be released from said restriction as such time as all One Acre
Lots have Access.
Mardians shall obtain such Access not later than 18 months after
the Stock Closing. In the event said Access is not obtained for some or all of
the One Acre Lots within this period, Mardians shall reconvey all shares
restricted as set forth in this Section 2.3(b) to Mego and Mego shall convey all
One Acre Lots without Access to the Mardians or their assigns.
2.4 MEGO shall use reasonably diligent efforts to register the
shares of MEGO Stock issued pursuant hereto with the Securities Exchange
Commission within 120 days after the Stock Closing. Registration will be done
under THE ACT in accordance with federal and applicable state law. MEGO shall
indemnify and hold the Mardians harmless against any claim or loss suffered or
incurred by the Mardians as a result of MEGO's errors or omissions in such
registration. The registration shall be completed at MEGO's sole cost and
expense. The registration shall be kept current by MEGO until all of the MEGO
Stock is sold or otherwise transferred by the Mardians in conformance with this
Agreement.
2.5 The consummation of the purchase of the AD Stock as
contemplated herein (the "Stock Closing"), shall occur on or before May 1, 2002,
provided, however, if the Public Reports have not been issued for the Lake Xxxx
Ranchos Units 5 and 7 One Acre Lots by such date, the Stock Closing may be
extended by MEGO from day to day, at MEGO's option, until the Public Reports are
issued.
2.6 MEGO shall be deemed to have extended the Stock Closing each day
unless MEGO gives the Mardians written notice of termination hereof, in which
event the parties shall be under no further obligation to each other. This
Agreement shall expire automatically if the Public Reports for Lake Xxxx Ranchos
Units 5 and 7 are not issued to MEGO's reasonable satisfaction on or before July
15, 2002, and the parties shall have no further obligations or liabilities
hereunder.
2.7 At the Stock Closing, the certificates represented by the AD Stock
shall be endorsed in blank, or accompanied by stock powers duly executed in
blank by the Mardians transferring all of the AD Stock owned by the Mardians to
MEGO or its assigns. At the Stock Closing, Mardians shall deliver to MEGO
originals of the Articles of Incorporation, Bylaws, Minute Books, Stock Records,
and all other documents pertaining to AD.
2.8 At the Stock Closing, Mardians shall deliver to MEGO, at Mardians
cost, an extended coverage title insurance policy issued by a title company
satisfactory to MEGO in the amount of $3,242,496 insuring that AD holds fee
title to the One Acre Lots free and clear of all matters except those matters
set forth on Exhibit "B" (the "Permitted Exceptions") and permanent, legal
access over a route satisfactory to MEGO.
2.9 Mardians shall not sell any shares of the MEGO Stock without first
offering such shares to MEGO at the then public market price of the stock and
the failure of MEGO to accept such offer at the then public market price of the
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MEGO shares, in writing within 10 days thereafter. Mardians may gift up to
100,000 shares of the MEGO Stock without first offering same to MEGO for
acquisition, subject to all donees accepting the MEGO stock as then restricted.
2.10 MEGO acknowledges that the One Acre Lots are subject to a lien
("Lien") pursuant to which the One Acre Lots may be released for $200,000. At
the Stock Closing, MEGO shall pay to Mardians $200,000 and simultaneously
therewith Mardians shall cause the One Acre Lots to be released from such lien.
3. Access.
3.1 Mardians shall use their best efforts to obtain Access for those One
Acre Lots without required Access, as soon as possible after the Stock Closing.
Access shall be obtained at the Mardians sole cost and expense. All information
and filings submitted by Mardians in connection therewith shall be true,
complete and in compliance with applicable law and regulatory procedures and
policies sufficient to obtain a Public Report.
4. INTENTIONALY OMITTED.
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5. Representations and Warranties.
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AD and the Mardians, jointly and severally, represent and warrant as of the
date hereof and as of Stock Closing, as follows:
5.1 This Agreement is valid and binding against the Mardians and AD
and neither the execution nor delivery of this Agreement by such parties will
constitute a material default under any contract, decree or obligation to which
any of them is bound. This Agreement is enforceable severally against the
Mardians and AD in accordance with its terms.
5.2 AD is a corporation duly organized and existing, in good standing
under the applicable laws of the state of formation. AD has the full corporate
power and authority to carry on its business as now conducted and to own and
operate the properties and assets now owned or leased by it. AD is duly
qualified to transact business in those states where in which the business or
ownership of property makes it necessary so to qualify.
5.3 Each of the Mardians has the full right and title to the AD Stock
to be sold pursuant hereto and the AD Stock constitutes all the AD Stock which
each of the Mardians own. Each of the Mardians holds its AD Stock free and clear
of all liens, encumbrances, restrictions and claims of every kind. Each of the
Mardians has the legal right, power and authority to enter into this Agreement
and to sell, assign, transfer and convey the AD Stock owned by her and to sell,
assign, transfer and convey the AD Stock by her and the delivery to MEGO of the
AD Stock pursuant hereto will transfer to MEGO valid title thereto, free and
clear of all liens, encumbrances, restrictions and claims of every kind. There
are no outstanding options, warrants, rights, calls, commitments, conversion
rights, rights of exchange, plans or other agreements of any character providing
for the purchase and sale of any AD Stock by any of the Shareholders.
5.4 The AD Stock transferred pursuant hereto to MEGO constitutes the
only outstanding shares of the stock of AD of any nature whatsoever, voting and
non-voting. The AD Stock is fully paid and assessable and validly issued. All AD
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Stock is certificated and AD has executed and delivered no certificates for
shares in excess of the number of shares of AD Stock transferred pursuant
hereto. There are no treasury shares.
5.5 The execution, delivery and performance of this Agreement by AD
has been duly authorized by the Board of Directors and all other corporate
approvals have been obtained. The execution, delivery and performance by the
Mardians and AD will not result in the violation or breach of any term or
provisions of charter instruments or constitute a default under any indenture,
mortgage, deed of trust or other contract and will not cause the creation of a
lien or encumbrance on any properties owned by or leased to or by AD.
5.6 AD has no liabilities or obligations of any nature (whether
accrued, contingent or otherwise).
5.7 The only assets of AD are the One Acre Lots and such lots are free
and clear of all matters except the Lien and Permitted Exceptions.
5.8 In all material respects, financial statements, if any, submitted
to MEGO are true, complete and correct and fairly and accurately present the
financial condition of AD.
5.9 AD (and any transferee and successor) has timely filed all
federal, state, or local tax returns, reports and forms, has followed in the
preparation of such returns, methods of accounting accepted by law and paid all
taxes owing and there are no deficiencies, fines, penalties or interest owing
thereon. The Mardians have paid or will pay by the date of the Stock Closing,
any property taxes or assessments on the One Acre Lots. No examinations, audit
or inquiry of any tax return, federal, state, local or otherwise is in progress
nor has AD or the Mardians received any notice of such inquiry, audit or
examination. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of AD.
5.10 There are no accounts receivable, unbilled invoices and other
debts due AD.
5.11 AD is not a party to any agreements, contracts or understandings
oral or written.
5.12 There are no lawsuits, arbitration actions or other proceedings
(equitable, legal, administrative or otherwise) pending or threatened and there
are no investigations pending or threatened.
5.13 Except as set forth below, AD and Mardians owe no fees or
commissions or other compensation or payments to any broker, finder, financial
consultant or similar person claiming to have been employed or retained by or on
behalf of AD or Mardians in connection with this Agreement or transactions
completed hereby.
5.14 The Company has no employees or former employees.
5.15 To the best of Mardians' knowledge, AD has conducted and
continues to conduct its business in compliance with all applicable statutes,
orders, rules and regulations including, without limitation, air, water, toxic,
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hazardous or toxic substances, noise or solid gaseous or liquid waste generation
handling storage or transportation and any laws, rules and regulations governing
the sale of property or marketing thereof.
5.16 AD has not directly or indirectly engaged in or been a party to
bribes, kickbacks or gratuities to secure favorable treatment or made any
contribution to a political party, candidate of office holder, receiving or
disbursing monies, the actual nature of which has been improperly disguised or
intentionally misrecorded or improperly omitted.
5.17 AD has no insurance policies.
5.18 AD has delivered to MEGO true, accurate and complete copies of
the Articles of Incorporation and Bylaws of AD together with all amendments
thereto.
5.19 The Minute books of AD provided to MEGO at Closing are the
correct and only such minute books and do and will contain complete and accurate
records of all proceedings and actions at all meetings, including written
consent in lieu of meetings. The stock records of AD delivered to MEGO at the
Stock Closing are the current and only such stock records and accurately
reflects all issues and transfers of AD.
5.20 No consent, approval or authorization of, or notification to or
registration with any governmental authority is required in connection with the
execution, delivery and performance of this Agreement by Mardians or AD.
5.21 Except for the issuance of a Public Report, AD has all required
licenses, certifications, approvals, authorizations and permits necessary to
conduct its business and has been in full compliance therewith.
5.22 Mardians represent and warrant that they are in receipt of and
have carefully read and understand the following offering material ("Offering
Material"):
(a) MEGO's Annual Report on Form 10-K for the year ended
August 31, 2001;
(b) MEGO's Quarterly Report on Form 10-Q for the quarter
ending November 30, 2001; and
(c) Such other information as they have requested in order
to evaluate their investment in MEGO.
5.23 Mardians acknowledge that they have had the opportunity to obtain
additional information beyond the Offering Material in order to verify the
information contained in the Offering Material and to evaluate the risks of an
investment in the MEGO Stock. With respect to individual or partnership tax and
other economic considerations involved in this investment, Mardians are not
relying on MEGO (or any agent or representative of MEGO). Mardians have
carefully considered and have to the extent Mardians believe such discussion
necessary, discussed with Mardians' legal, tax, accounting and financial
advisers the suitability of an investment in the MEGO Stock for Mardians'
particular tax and financial information.
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5.24 Mardians acknowledges that they have had the opportunity to ask
questions of and receive answers from qualified representatives of MEGO
concerning the terms and conditions of this Agreement and of the MEGO Stock to
be issued hereunder, as well as the information contained in the Offering
Material, and it has been granted access, prior to subscribing to the MEGO Stock
and prior to the purchase thereof, to all books, records and documents of MEGO
and it subsidiaries.
5.25 Mardians acknowledge that they are sophisticated investors familiar
with the type of risks inherent in the acquisition of securities such as the
MEGO Stock and that, by reason of their knowledge and experience in financial
and business matters in general, and investments of this type in particular, and
the knowledge and experience in financial and business matters of their
representatives and agents, it is capable of evaluating the merits and risks of
an investment by them in the MEGO Stock.
5.26 Mardians' financial condition is such that they are under no present
need, in order to satisfy any existing or contemplated understanding or
indebtedness, to dispose of any portion of the MEGO Stock which it is purchasing
hereunder. Mardians are able to bear the economic risk of an investment in the
MEGO Stock, including, without limiting the generality of the foregoing, the
risk of losing part or all of its investment in the MEGO Stock and its probable
inability to sell or transfer the MEGO Stock for an indefinite period of time.
5.27 Mardians are not acquiring the MEGO Stock for the purpose of or in
connection with any distribution within the meaning of the Securities Act of
1933 (the "Act") or other securities laws in violation of the Act or other
securities laws.
5.28 Mardians understand that, because the MEGO Stock has not been
registered under the Act or other securities laws, the MEGO Stock therefor must
be held indefinitely unless the MEGO Stock is subsequently registered under the
Act and other securities laws or until an exemption from such registration
thereunder is available.
5.29 Mardians are aware that any sales which may be made in reliance upon
Rule 144 promulgated under the Act, may be made only if MEGO is in compliance
with the reporting and other requirements under Rule 144, and then only in
limited amounts, after the required holding periods, and otherwise in accordance
with the terms and conditions of Rule 144.
5.30 Mardians acknowledge that they are each an "accredited investor"
within the meaning of Rule 501(a) of Regulation D promulgated under the Act.
5.31 Mardians recognize that investment in the MEGO Stock involves
substantial risks. Mardians further recognize that no federal or state agencies
have passed upon this offering of the MEGO Stock or made any findings or
determinations to the fairness of this investment.
5.32 Mardians are not subscribing for the MEGO Stock as a result of or
subsequent to any advertisement, article, notice of other communication
published in any newspaper, magazine, or similar media or broadcast over
television or radio or presented at any seminar.
5.33 Mardians acknowledge that MEGO has relied on the representations
contained herein and that the statutory basis for exemption from the
requirements of Section 5 of the Act may not be present if, notwithstanding such
representations, Mardians were acquiring the MEGO Stock for resale or
distribution upon the occurrence or non-occurrence of some predetermined event.
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5.34 Other than as stated in this Agreement, neither Mardians nor any of
their affiliates (as such term is defined in Rule 12b-2 of the Securities
Exchange Act of 1934 (the "Exchange Act")) ("Affiliates") or representatives are
party to, or are bound by any contract, agreement, arrangement or understanding
(whether written or not) with respect to MEGO or any of its subsidiaries or any
securities of MEGO or any of its subsidiaries, including without limitation, any
(i) contract, agreement, arrangement or understanding (whether written or not)
which requires such party to (x) repurchase, redeem or otherwise acquire any
shares of capital stock of, or other equity or voting interest in, MEGO or any
of its subsidiaries or (y) vote or dispose of any shares of capital stock of, or
other equity or voting interest in MEGO or any of its subsidiaries or (ii)
irrevocable proxy, voting agreement or similar agreement, arrangement or
understanding (whether written nor not) with respect to any shares of capital
stock of MEGO or any of its subsidiaries.
5.35 The execution, delivery and performance of this Agreement by the
Mardians, and the taking of all action contemplated hereby and the other
ancillary agreements contemplated hereby, will not result in any violation of or
conflict with or constitute a default under any term of any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to it (which violation or conflict would materially and adversely
affect the property, business, operations or financial condition of Mardians),
or result in the creation of any mortgage, lien, charge or encumbrance upon any
of the properties or assets of Mardians pursuant to any such term.
5.36 To the best of the Mardians' knowledge, neither Mardians nor AD has
placed, stored, discharged or otherwise released, nor to the best of Mardians'
knowledge, has any other party placed, stored, discharged or otherwise released,
nor are there present, upon or under the One Acre Lots, any asbestos containing
materials, asbestos fibers, urea formaldehyde, VXKV biphenyls ("PCBs),
petroleum, its derivatives, by-products or other hydrocarbons, explosives,
radioactive materials, hazardous wastes, toxic or dangerous materials or
substances including without limitation, substances defined as "hazardous
substances," "hazardous wastes," "hazardous materials," toxic substances" or
"solid waste" in any federal state or local statute, law, ordinance, code, rule,
regulation or decree, relating to imposing liability or standards of conduct
concerning hazardous, dangerous or toxic materials waste or substances.
5.37 Mardians agree that their representations and warranties contained in
this Agreement shall survive the Stock Closing for the respective periods shown
in 13.17 of this Agreement.
6. Indemnity.
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6.1 Each of the Mardians, and Xxxxxxx Xxxxxxx jointly and severally, hereby
defend, indemnify and hold MEGO, its directors, officers, employees, agents and
contractors harmless from any breach of the representations, warranties and
covenants herein or any other liability, obligation, loss, claim, demand, costs,
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expenses and fees (including reasonable attorneys' fees) arising prior to the
Stock Closing and all suits, actions, proceedings, demands, judgments, costs and
expenses incident thereto, including but not limited to any action or matter
involving AD, the AD Stock and/or the One Acre Lots. If a claim is made against
MEGO for which it is indemnified, MEGO will (i) notify Mardians; (ii) conduct
its own defense; (iii) be reimbursed by the Mardians for all costs and fees
(including attorneys' fees), monthly or upon settlement; and (iv) have the right
to settle the claim with the consent of Mardians not to be unreasonably withheld
or delayed.
7. Entry; Documents.
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7.1 Prior to the Stock Closing, MEGO, its contractors, agents or
representatives shall be entitled to enter the One Acre Lots and conduct such
testing, investigations, studies, and analysis as it deems appropriate. MEGO
shall indemnify and hold the Mardians harmless for any damage to the One Acre
Lots or for any injury suffered by a person lawfully on the One Acre Lots as a
result of MEGO's activities.
7.2 Mardians shall deliver to MEGO within five (5) days after execution
hereof copies of the Articles of Incorporation, Bylaws, Minute Book of AD and
similar materials and all reports, studies, analysis, surveys, environmental
audits and other written materials concerning the One Acre Lots and AD in the
possession of Mardians, AD, or any affiliate thereof. If Mardians, AD or any
affiliates thereof come into possession of any additional written materials
thereafter, they shall promptly deliver such materials to MEGO.
8. Representations and Warranties of MEGO.
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MEGO represents and warrants to the Mardians and AD that:
8.1 MEGO is duly organized and existing, in good standing under the laws of
its state formation. MEGO has full corporate power and authority to carry on
its business as now conducted. MEGO is duly qualified to do business in Nevada
and in all states and jurisdictions in which the business or ownership of MEGO's
properties or assets make it necessary to qualify.
8.2 The execution, delivery and performance of this Agreement have been
duly authorized by MEGO's Board of Directors. This Agreement is valid and
binding upon MEGO and is enforceable against MEGO in accordance with its terms,
subject to bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium, receivership or other similar laws relating to or affecting creditor
rights generally.
8.3 Neither the execution nor delivery of this Agreement by MEGO, nor the
performance by MEGO of any of the covenants or obligations to be performed by
MEGO hereunder, will result in any violation of any order, decree or judgment of
any court or other governmental body or statute or law applicable to MEGO or of
any terms of the Articles of Organization or Bylaws or constitute a default
under any indenture, mortgage, deed of trust or other contract to which MEGO is
a party.
8.4 Except as set forth herein, no consent, approval or authorization of,
or notification to, or registration with any governmental authority, either
federal, state or local is required in connection with the execution, delivery,
and performance of this Agreement by MEGO.
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8.5 Except as set forth below, MEGO has not entered into any obligations to
pay any fee or commission to any broker, finder or intermediary for, or on
account of the transactions contemplated by this Agreement.
8.6 All fillings by MEGO with Securities Exchange Commission are current
and will remain current.
8.7 The representations and warranties of MEGO contained in this Agreement
shall survive the Stock Closing for the period of time shown in 13.17 of this
Agreement.
8.8 MEGO shall indemnify and hold Mardians harmless from and against
any action, damages or injuries incurred by the Mardians and assigns from MEGO's
inaccurate statements or omissions in a Public Report or registration of the
MEGO Stock.
8.9 For so long as the Mardians own any of the MEGO Stock, MEGO shall
remain in compliance with Rule 144 reporting and other requirements.
9. Operating Covenants.
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9.1 AD and Mardians shall not engage in any activity, including, without
limitation, the marketing of the One Acre Lots, except registering such Lots,
through PEC, with the appropriate authorities and obtaining a Public Report
therefor.
10. Conditions Precedent to Obligations.
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10.1 MEGO shall not be obligated to consummate the Stock Closing unless:
10.1.1 AD and Mardians are not in default hereunder.
10.1.2 AD and Mardians deliver to MEGO a certificate that all
representations and warranties set forth in this Agreement are true and correct.
10.1.3 Each of the Mardians shall deliver to MEGO all AD Stock free
and clear of any liens, encumbrances and obligations.
10.1.4 AD and Mardians shall have obtained Property Reports for all
One Acre Lots in Xxxxx 0 xxx 0 xx Xxxx Xxxx Xxxxxxx, which said Property Reports
shall be reasonably satisfactory to Mego.
10.1.5 There shall not have occurred any material adverse change in
the assets, business, condition or prospects of AD.
10.1.6 Subject to MEGO's $200,000.00 cash payment at the Stock
Closing, all One Acre Lots are to be free of all liens and encumbrances other
than Permitted Encumbrances.
The foregoing conditions are solely for the benefit of MEGO and MEGO shall be
entitled to consummate this transaction despite the failure of any condition. If
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any condition is unfulfilled at the Stock Closing, MEGO shall be entitled, in
addition to any other remedy herein, to terminate this Agreement by written
notice to the Mardians. Failure by MEGO to terminate shall not be deemed a
waiver of any default hereunder. Mardians shall not be obligated to consummate
the Stock Closing unless MEGO, on the Stock Closing date, delivers a certificate
to the Mardians in conformance with 10.1.2 of this Agreement and delivers the
MEGO Stock subject only to the restrictions shown in 2.3(a) and (b) of this
Agreement, as applicable.
11. Company Board of Directors.
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11.1 On the Stock Closing, the Board of Directors and officers of AD shall
consist of such persons as MEGO shall select and resignations of existing
directors and officers will be delivered to MEGO as requested.
12. Risk of Loss.
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12.1 The risk of loss or destruction of all or any part of any of the AD's
properties or assets prior to the Stock Closing from any cause (including,
without limitation, fire, theft, acts of God or public enemy) shall be upon the
AD and the Mardians. Such risk shall be upon MEGO if such loss occurs after the
Stock Closing.
13. Miscellaneous.
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13.1 BINDING AGREEMENT. The parties covenant and agree that this
Agree-ment, when executed and delivered by the parties, will constitute a legal,
valid and binding agreement between the parties and will be enforceable in
accordance with its terms.
13.2 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto, their legal
representatives, successors and assigns. In no event shall the Mardians or AD
assign their respective rights or obligations hereunder, either directly or
indirectly.
13.3 ENTIRE AGREEMENT. This Agreement and its exhibits and schedules
constitute the entire contract among the parties hereto with respect to the
subject matter thereof, superseding all prior communications and discussions and
no party hereto shall be bound by any communi-cation on the subject matter
hereof unless such is in writing signed by any necessary party thereto and bears
a date subsequent to the date hereof. The exhibits and schedules shall be
construed with and deemed as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein. Information set forth
in any exhibit, schedule or provision of this Agreement shall be deemed to be
set forth in every other exhibit, schedule or provision of this Agreement and
therefore shall be deemed to be disclosed for all purposes of this Agreement.
13.4 MODIFICATION. This Agreement may be waived, changed, amended,
discharged or terminated only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, amendment, discharge or
termination is sought.
13.5 NOTICES. All notices, requests, demands and other communications shall
be in writing and may be given by overnight courier, personal delivery or
facsimile and deemed to have been duly given three (3) days after postmark of
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deposit in the United States mail, if mailed, certified or registered mail,
postage prepaid:
If to AD or the Mardians:
0000 X. Xxxxxxx Xxxx.
PMB 324
Las Vegas, Nevada 89103
Attn: Xxxxx Xxxxxxx
If to Mego:
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxx X. Xxxxxx
With a copy to:
Xxxxxxx & Xxxxx Xxxxxxx Xxxx, LLP
Renaissance Xxx
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. May, Esq.
or to such other address as any party shall designate to the other in writing.
The parties shall promptly advise each other of changes in addresses for such
notices.
13.6 CHOICE OF LAW. This Agreement shall be governed by, construed,
interpreted and enforced according to the laws of the State of Nevada.
13.7 SEVERABILITY. If any portion of this Agreement shall be finally
determined by any court or governmental agency of competent jurisdiction to
violate applicable law or otherwise not to conform to requirements of law and,
therefore, to be invalid, the parties will cooperate to remedy or avoid the
invalidity, but, in any event, will not upset the general balance of
relationships created or intended to be created between them as manifested by
this Agreement and the instruments referred to herein. Except insofar as it
would be an abuse of the foregoing principle, the remaining provisions hereof
shall remain in full force and effect.
13.8 OTHER DOCUMENTS. The parties shall upon reasonable request of the
other, execute such documents as may be necessary or appropriate to carry out
the intent of this Agreement.
13.9 HEADINGS AND THE USE OF PRONOUNS. The paragraph headings hereof are
intended solely for convenience of reference and shall not be construed to
explain any of the provisions of this Agreement. All pronouns and any
variations thereof and other words, as applicable, shall be deemed to refer to
the masculine, feminine, neuter, singular or plural as the identity of the
person or matter may require.
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13.10 TIME IS OF THE ESSENCE. Time is of the essence of this Agreement.
13.11 NO WAIVER AND REMEDIES. No failure or delay on a parties part to
exercise any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by a party of a right or remedy hereunder
preclude any other or further exercise. No remedy or election hereunder shall
be deemed exclusive but it shall, where ever possible, be cumulative with all
other remedies in law or equity.
13.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and by the different parties hereto on separate counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
13.13 FURTHER ASSURANCES. Each of the parties hereto shall use commercially
practicable efforts to fulfill all of the conditions set forth in this Agreement
over which it has control or influence (including obtaining any consents
necessary for the performance of such party's obligations hereunder) and to
consummate the transactions contemplated hereby, and shall execute and deliver
such further instruments and provide such documents as are necessary to effect
this Agreement.
13.14 RULES OF CONSTRUCTION. The normal rules of construction which require
the terms of an agreement to be construed most strictly against the drafter of
such agreement are hereby waived since each party has been represented by
counsel in the drafting and negotiation of this Agreement. Any representation,
warranty or agreement of the Mardians shall be joint and several.
13.15 THIRD PARTY BENEFICIARIES. Each party hereto intends this Agreement
shall not benefit or create any right or cause of action in or on behalf of any
person other than the parties hereto.
13.16 COMMISSIONS. At such time as and only if Stock Closing occurs, MEGO
shall be responsible for a finders fee of $40,752 to Industrial Properties Group
(Xx Xxxxxxx) (the "Broker") and Mardians shall be responsible for a finders fee
of 4% of the sales price to be delivered in a form to be agreed between Mardians
and Broker. At such time as and only if the Mardians provide Ranchos Unit
6/Sunny Lake Ranchos Access, MEGO shall be responsible for a finders fee to
Broker of $88,948.00 and Mardians shall be responsible for a finders fee to
Broker of $88,948.00.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding anything
herein to the contrary, any representation, warranty and indemnity in connection
therewith and covenants by Xxxxxxx, AD or MEGO shall expire five (5) years from
the date of the Stock Closing.
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13.17 IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date written above.
ATLANTIC DEVELOPMENT MEGO FINANCIAL CORPORATION, a
CORPORATION, a Nevada corporation New York corporation
By: By:
---------------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. XxXxxxxxx
Its: President Title: Executive Vice President
XXXXX X. XXXXXXX
------------------------------------
XXXX X. XXXXXXX
-------------------------------------
XXXXXXX X. XXXXXXX
For the purposes of being bound only pursuant to Section 6.1 of this Agreement.
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EXHIBIT "A"
-----------
PARCEL 1 (541 Lots)
----------------------
Lots 3688 through 4228, inclusive, of Lake Xxxx Ranchos Unit 5,
according to the plat thereof, recorded June 20, 1961, at Fee No.
104507, in the office of the County Recorder of Mohave County,
Arizona.
Except therefrom, all coal, oil, gas and mineral deposits as reserved
in Instrument recorded in Book 86 of Deeds, Page 49.
PARCEL 2 (402 Lots)
----------------------
Lots 4229 through 4281, inclusive, and lots 4283 through 4631,
inclusive, of Lake Xxxx Ranchos Unit 6, according to the plat thereof,
recorded June 20, 1961, at Fee No. 104508, in the office of the County
Recorder of Mohave County, Arizona.
Except therefrom, all coal, oil, gas and mineral deposits as reserved
in Instrument recorded in Book 86 of Deeds, Page 49.
PARCEL 3 (567 Lots)
----------------------
Lots 4633, 4635 through 4649, inclusive, 4654 through 4662, inclusive,
4664 through 4679, inclusive, 4681, 4682, 4684 through 4689,
inclusive, 4692 through 4716, inclusive, 4718 through 4728, inclusive,
4730 through 4785, inclusive, 4787, 4789 through 4792, inclusive,
4794, 4796 through 4810, inclusive, 4812 through 4824, inclusive, 4826
through 4846, inclusive, 4849 through 4865, inclusive, 4867 through
4871, inclusive, 4874 through 4884, inclusive, and 4886 through 5223,
inclusive, of Lake Xxxx Ranchos Unit 7, according to the plat thereof,
recorded June 20, 1961, at Fee No. 104509, in the office of the County
Recorder of Mohave County, Arizona.
Except therefrom, all coal, oil, gas and mineral deposits as reserved
in Instrument recorded in Book 86 of Deeds, Page 49.
PARCEL 4 (511 Lots)
----------------------
Lots 28 through 31, inclusive, 34 through 48, inclusive, 50 through
74, inclusive, 80 through 100, inclusive, 105 through 126, inclusive,
132 through 154, inclusive, 159 through 391, inclusive, 393 through
413, inclusive, 426, and 437 through 582, inclusive, of Sunny Lakes
Ranchos Unit 1, according to the plat thereof, recorded December 19,
1961, at Fee No. 108884, in the office of the County Recorder of
Mohave County, Arizona.
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Except therefrom, all coal, oil, gas and mineral deposits as reserved
in Instrument recorded in Book 86 of Deeds, Page 49.
ALL AS MORE FULLY SET FORTH IN WARRANTY DEED FROM ARIZONA ACREAGE, LLC, A NEVADA
LIMITED LIABILITY COMPANY TO ATLANTIC DEVELOPMENT CORP., A NEVADA CORPORATION,
RECORDED MARCH 5, 2002 AS DOCUMENT NUMBER 2002014368 IN BOOK 4012, PAGE 174, IN
THE OFFICE OF THE COUNTY RECORDER OF MOHAVE COUNTY, ARIZONA.
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EXHIBIT "B"
-----------
PERMITTED EXCEPTIONS
17
------
Exhibit B
Order No. 000-00-000000
--------
Part One:
1. Taxes or assessments which are not shown as existing liens by the records
of any taxing authority that levies taxes or assessments on real property
or by the public records.
Proceedings by a public agency which may result in taxes or assessments, or
notices of such proceedings, whether or not shown by the records of such
agency or by the public records.
2. Any facts, rights, interests or claims which are not shown by the public
records but which could be ascertained by an inspection of the land or by
making inquiry of persons in possession thereof. *
3. Easements, liens or encumbrances, or claims thereof, which are not shown by
the public records.
4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments
or any other facts which a correct survey would disclose, and which are not
shown by the public records.
5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or
in Acts authorizing the issuance thereof; (c) water rights, claims or title
to water.
6. Any lien, or right to a lien, for services, labor or material, theretofore
or hereinafter furnished, imposed by law and not shown by the public
records.
* On the Stock Closing Date, that certain Grazing Lease which affects
the One Acre Lots shall be terminated so as not to affect the One Acre
Lots.
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Exhibit B
Order No. 000-000-000000
--------
Part Two:
(All recording dates refer to records in the office of the County Recorder in
the County in which the land is situated.)
EXCEPTIONS:
1. Taxes for the full year of 2002. (The first half is due October 1, 2002 and
is delinquent November 1, 2002. The second half is due March 1, 2003 and is
delinquent May 1, 2003.)
2. All matters as set forth in the Covenants, Conditions, and Restrictions in
instrument recorded in Docket 138, Page 472, but deleting any covenant,
condition or restriction indicating a preference, limitation or
discrimination based on race, color, religion, sex, handicap, familial
status or national origin to the extent such covenants, conditions or
restrictions violate 42 USC 3604(c). (Parcel No. 2)
3. Easements, restrictions, reservations, conditions and set-back lines as set
forth on the plat, recorded at Fee Nos 61-104507 and 61-104509, but
deleting any covenant, condition or restriction indicating a preference,
limitation or discrimination based on race, color, religion, sex, handicap,
familial status or natural origin to the extent such covenants, conditions
or restrictions violate 42 USC 3604 (c).
4. The right to enter upon said land and prospect for, mine and remove all
coal, oil, gas and other mineral deposits, as reserved in instrument
recorded in Book 86 of Deeds, Page 49.
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