EXHIBIT 10.5
Exhibit 10.5
CONTRACT FOR DEED FOR
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ WITHIN PLAZA ROSARITO
CONTRACT FOR DEED FOR
PLAZA SOL
EXHIBIT C
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THIS AGREEMENT IS made as of this 30th day of April 2001, between
Senior Care International, S.A. de C.V., or assignee, ("Buyer"), a Mexican
corporation and Tri-National Holdings, S.A. de C.V., ("Seller"), a Mexican
corporation. In consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
ARTICLE 1 - Purchase and Sale of Assets
1.01 - Assets
The assets to be conveyed, transferred, signed, and delivered, as
provided by this Agreement, shall, without limitation include 100% of the Tri-
National Development Corp stock in Seller, plus 15 acres of the beach front
property, (see Exhibit 3-A "Legal Description and Appraisal") known as Plaza
Rosarito owned by Tri-National Holdings, S.A. de C.V., a Mexican corporation,
subject. Seller is seeking approval from Capital Trust, Inc. to sell the stock
of Tri-National Holdings, S.A. de C.V. to Senior Care International, which owns
the 15 acres, which will be transferred to Buyer for a total purchase price of
$13,000,000. In addition, the assets would include, 9 acres of the developed
property including approximately 170,000 square feet of existing commercial
space, (see Exhibit 2-A "Legal Description and Appraisal") known as the Plaza
Sol also owned by Tri-National Holdings, S.A. de C.V.. The Plaza Sol will be
transferred to Buyer, including land, for a total purchase price of $20,200,000.
Other than the assets referenced above, this Agreement does not include any
other assets of Tri-National Holdings, S.A. de C.V..
TOTAL PURCHASE PRICE: $33,200,000
1.02 - CONSIDERATION
AS FULL PAYMENT FOR THE TRANSFER OF THE ASSETS BY SELLER TO BUYER,
THE LATTER SHALL DELIVER AT CLOSING, THE FOLLOWING: $33,200,000 OF CLASS F
CONVERTIBLE PREFERRED STOCK ("SHARES") IN SENIOR CARE INDUSTRIES AT CLOSING.
(i) AT CLOSE OF ESCROW, THE $33,200,000 BALANCE OF THE
PURCHASE PRICE SHALL BE PAID BY SENIOR CARE ISSUING
500,000 SHARES OF SERIES "F" CONVERTIBLE PREFERRED
STOCK CONVERTIBLE 20 TO 1 INTO RULE 144 COMMON STOCK
UNDER A CONVERSION FORMULA WHEREIN 20% OF THE
PREFERRED STOCK MAY BE CONVERTED TO RULE 144 COMMON
STOCK IN THE 24TH MONTH AFTER OF THE ACQUISITION BY
SENIOR CARE CLOSE (THE FIRST CONVERSION DATE) AND
(ii) EACH SUCCESSIVE ONE YEAR PERIOD FOLLOWING THE FIRST
CONVERSION DATE. (1)
(iii) SENIOR CARE TO HAVE AN IRREVOCABLE OPTION TO ACQUIRE
UP TO 100% OF THE 144 STOCK CREATED BY THE CONVERSION
ON EACH CONVERSION DATE ON A PRO-RATA BASIS IN
INCREMENTS UP TO $5,100,000 AT EACH CONVERSION. (2)
SELLER SHALL ALLOW BUYER TO ACQUIRE $8,000,000 IN SERIES "F" PREFERRED STOCK
FROM SELLER OUT OF THE FIRST SALES PROCEEDS FROM PLAZA SOL CONDOMINIUM SALES.
BUYER HEREBY COMMITS TO ACQUIRE SAID $8,000,000 IN SERIES "F" PREFERRED STOCK
PROVIDING THE SELLER UTILIZES THE $8,000,000 TO PAY TRI-NATIONAL DEVELOPMENT
CORP OBLIGATIONS. SHOULD BUYER ACQUIRE SAID $8,000,000 IN SERIES "F" PREFERRED
STOCK, IT SHALL BE CREDITED TOWARD ON A PRO-RATA BASIS PURSUANT TO SECTION 1.02
(III) AS ONE FULL CONVERSION PAYMENT OF $6,640,000 PLUS A PARTIAL CONVERSION
PAYMENT OF $1,360,000 CREDITED TOWARD THE NEXT SUCCESSIVE CONVERSION DATE.
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(1) On the 24th month following the close of escrow and for each successive one
year period following the first conversion date, the number of preferred shares
converted shall be adjusted to reflect the average ask price of the rule 144
common stock at time of each conversion, for the prior 10 day period. The amount
of stock to be converted each conversion date shall equal 20% of the purchase
price Example: Based upon the purchase price of $33,200,000 the balance to be
paid through the conversion of preferred stock on the each conversion date would
equal ($33,200,000 * 20% = $6,640,000 on each conversion date. If on the 24th
month after close, the average ask price is $2.50 per share, 132,800 shares of
preferred stock would be converted at a 20 to 1 conversion netting the seller
(102,000 * 20) = 2,656,000 shares of rule 144 common stock valued at $2.50 per
share for a total of $6,640,000. The same formula will be applied on each
successive one- year period following first conversion date, such that, if on
next conversion date, the average ask price is $5.00 per share, 61,400 shares of
preferred stock would be converted at a 20 to 1 conversion netting the seller
(50,100 * 20) = 1,328,000 shares of rule 144 common stock valued at $5.00 per
share for a total of $6,640,000 and so on, such that for each successive
conversion, the total shares converted under the formula will reflect the
average stock price. At the end of the fifth conversion, any preferred stock
that is not required for conversion in order to pay the full purchase price
shall be returned to the SENR treasury. In the alternative, additional preferred
stock shall be issued to Seller in the event that the ask price under the
conversion formula results in a requirement for more stock to be issued in order
for Seller to receive the full sales price. In the event Buyer takes possession
of the deed of the 9 acres of developed property including the 170,000
commercial building prior to the commercial building reaching stabilized
occupancy, the price paid for the commercial building shall reduce to
$12,500,000 and the total purchase price for the assets referenced in section
1.01 shall equal $25,500,000. Furthermore, Buyer, acknowledges that Seller may
convey only a 60% undivided interest in the real property, assets and stock
referenced in Section 1.02 herein, in which event the price paid by Senior Care
International shall be reduced by multiplying $33,200,000 by 60% (or in the
alternative, by multiplying $25,500,000 by 60%) with a revised payment on each
conversion date equal to 20% of the adjusted purchase price.
(2) On each conversion date, $6,640,000 worth of stock may be converted by the
Seller, pursuant to footnote #1. Senor Care to have up to 30 days after the
stock converts to acquire all or a portion of the $6,640,000 in stock, except
for the first year which will be 180 days. The stock may not be sold or
hypothecated to a third party within said 180 day period and the party
converting the stock shall assign its voting rights to the Board of Directors of
Senior Care the day the stock converts and Senior Care's Board shall have the
right to "vote the stock" within said 180 day period.
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1.03 - Profit Participation
Tri-National Development Corp. to receive a 12.5% interest in profits
resultant from the future development and sale of the developments referenced
herein, until such time as the Preferred Shares have been converted, thereafter
the interest is reduced to 7.5%.
1.04 - Default
In the event Seller is unable to convert any or all of the Shares of
Buyer for the consideration outlined in paragraph 1.02, Buyer will be required
to return the portion of the upaid assets transferred to Buyer pursuant this
agreement no later than 30 days from the notice of default from Seller to Buyer.
1.05 - Escrow
The close of escrow for this Agreement will take place on or before
the 30th day of April, 2001 through escrow number 19010777 held at New Century
Title on ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ in Orange, California, or another location and or
title company chosen by Buyer. Subsequent to the close, the Buyer will form a
Mexican corporation to take legal possession of the deed to the Assets
referenced in section 1.01 herein.
1.06 - Taxes
Buyer shall pay all taxes and fees, arising out of the transfer of
the assets.
ARTICLE 2 - Representations and Warranties of Seller
2.01 - Warranties
Seller represents and warrants that;
Organization:
Seller is a corporation duly organized, validly existing, and in
good standing under the laws of Mexico, has all necessary corporate powers to
own and sell its properties and carry on business as now owned and operated by
it and is in good standing in the United States of Mexico.
Title:
Seller through is the owner, beneficially and of record, of all
assets identified or referred to in paragraph 1.01 of this Agreement which as of
closing shall be free and clear of all liens, encumbrances, security agreements
and any other restrictions, upon the approval of the sale as previously
disclosed by Capital Trust. In the event that such approval or a modification is
not gained, the parties reserve the right to restructure this agreement if
possible.
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Condition of Property:
Seller confirms that the property identified or referred to in
paragraph 1.01 of this Agreement is fit for human occupation and has not been
used in the past for the deposit or storage of hazardous waste or chemicals and
that it is suitable for its intended purpose as outlined in this Agreement and
is being conveyed on an 'as is basis".
2.02 - Absence of Changes
Since March 1, 1997, there has not been and will not at closing be
any changes in the financial condition or operation of Seller, except changes in
the ordinary course of business, which changes have not in the aggregate been
materially adverse to Buyer's interests.
2.03 - Compliance With Laws
Seller represents that, to the best of its knowledge, it has
complied with, and is not in violation of any applicable federal, state or local
statutes, laws or regulations, affecting the assets or operation of the business
of Seller, both in Mexico and in the United States.
2.04 - No Breach or Violation
The consummation of the transaction contemplated by this Agreement
shall not result in or constitute any of the following: (i) A breach of any term
or provision of this Agreement; (ii) A default or event that, upon notice or
lapse of time or both, would be a default, breach or violation of the Articles
of Incorporation or Bylaws of SELLER, or any lease, license, promissory note,
contract, commitment or other agreement, instrument or arrangement to which
Seller is a party; (iii) An event that would permit any party to terminate any
agreement.
2.05 - Authority
Seller has the right, power, legal capacity and authority to enter
into and perform its respective obligations under this Agreement, subject only
to its Board of Directors approval and the requested approval of Capital Trsut.
2.06 - Full Disclosure
None of the representations and warranties made by Seller,
hereunder, or on its behalf, contains or shall contain any untrue statement of
material fact, or omits or shall omit any material fact, the omission of which
would be misleading.
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ARTICLE 3 - Representations and Warranties of Buyer
Buyer represents and warrants that: (i) Organization: Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of Nevada,
has all necessary corporate powers to own and sell its properties and carry on
business as now owned and operated by it and is in good standing in the State of
Nevada; (ii) Pre-existing Relationship: Buyer has a pre-existing business
relationship with Seller of a nature and duration that has enabled it to
evaluate the business and financial circumstances of Seller and the risks and
merits of this acquisition.
ARTICLE 4 - Obligations Before Closing
4.01 - Seller's Covenants
Seller covenants that from the date of this Agreement until the
closing: (i) Access to Information: Buyer and its representatives shall have
full access during all business hours to all properties, books, accounts,
records, contracts, and documents of, or relating to the assets and property of
Seller being sold hereunder; (ii) Conduct of Business: Seller shall carry on its
business and activities diligently and in substantially the same manner as it
previously has been carried on, and shall not institute or use any unusual or
novel methods of manufacture, purchase, sale, lease, management, accounting or
operation that shall vary materially from those methods used by Seller as of the
date of this Agreement.
4.02 - Warranties at Closing
Representations and warranties of Seller and Buyer set forth in this
Agreement, shall also be true and correct as of the closing date as if made on
that date.
ARTICLE 5 - Conditions Precedent to Buyers Performance
5.01 - Conditions
The obligations of Buyer to purchase the assets under this Agreement
are subject to the satisfaction, at or before closing, of all of the conditions
set out below in this Article 5. Seller may waive any or all of those conditions
in whole or in part without prior notice.
5.02 - Accuracy of Representations
Except as otherwise set forth in this Agreement, all representations
and warranties by Seller in this Agreement shall be true on and as of the
closing date as though made at that time.
5.03 - Performance of Seller
Seller shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by it on or before the closing date. During the period from
execution of this Agreement by both parties to the closing date, there shall not
have been any material adverse change in the financial condition or the results
of operations of Seller other than previously disclosed and Seller shall not
have sustained any material loss or damage to its assets, whether or not
insured, that materially affects its ability to conduct a material part of its
business.
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5.04 - Absence of Litigation
No action, suit or proceeding before any court or any governmental
body or authority, pertaining to the transaction contemplated by this Agreement
other than previously disclosed, shall have been instituted or threatened on or
before closing date.
5.05 - Consents
All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been obtained by
Seller and delivered to Buyer at or before closing.
ARTICLE 6 - Conditions Precedent to Seller's Performance
6.01 - Conditions
The obligations of Seller to sell and transfer the assets under this
Agreement are subject to the satisfaction, at or before the closing, of all the
following conditions in this Article 6.
6.02 - Accuracy of Representations
Except as otherwise set forth in this Agreement, all representations
and warranties by Buyer in this Agreement shall be true on and as of the closing
date as though made at that time.
6.03 - Buyers Warranties
All representations and warranties by Buyer in this Agreement shall
be true on and as of the closing date as though such representations and
warranties were made on and as of that date.
6.04 - Absence of Litigation
No action, suit or proceeding before any court or any governmental
body or authority, pertaining to the transaction contemplated by this Agreement
other than previously disclosed, shall have been instituted or threatened on or
before closing date.
6.05 - Performance of Buyer
Buyer shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by it on or before the closing.
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6.06 - Bankruptcy
In the event of bankruptcy, receivership or insolvency by the Buyer,
the Seller shall succeed to the rights and or position in the Plaza Sol and the
15 acres and or any subsequent contracts that may have been entered into for the
development of the property. Neither party shall assign or sell their interest
in this Agreement without the other party's consent, which shall not be
unreasonably withheld. The parties also agree to enter into a formal buy & sell
agreement at the earliest possible date.
6.07 - Consents
All necessary agreements and consents to the consummation of the
transaction contemplated by this Agreement, if any, shall have been obtained by
Seller and delivered to Buyer at or before closing, except as outlined in
Article 1, Section 1.01 - Assets.
ARTICLE 7 - The Closing
7.01 - Closing
The Closing of the purchase and sale described herein shall take
place on or before April 30, 2001 at 10:00 A.M. Pacific Time, at the offices of
Seller ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ or at another time and
place agreeable to the parties.
7.02 - Seller's Obligations At the Closing
Seller shall deliver or cause to be delivered to Buyer: (i)
Instruments of placement of all assets or other property of SELLER being
acquired hereunder by Buyer into an escrow, with title being available subject
only to receipt by Seller of full payment pursuant to this Agreement.
7.03 - Buyer's Obligations
Buyer shall execute and deliver to Seller: (i) Convertible Preferred
Shares in paragraph 1.02 of this Agreement in a form acceptable to Seller.
ARTICLE 8 - Costs
8.01 - Expenses
Each of the parties shall pay its own costs and expenses incurred or
to be incurred by it in negotiation and preparation of this Agreement and in
closing and carrying out the transactions contemplated by this Agreement.
ARTICLE 9 - Form of Agreement
9.01 - Headings
The Subject Headings of the paragraphs and subparagraphs of this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of its provisions.
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9.02 - Modification and Waiver
This Agreement constitutes the agreement between the parties
pertaining to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties.
No supplement, modification, or amendment for this Agreement shall be binding
unless executed in writing by all the parties. No Waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a Waiver of
any other provisions, whether or not similar, nor shall any Waiver constitute a
continuing Waiver. No Waiver shall be binding unless executed in writing by the
party making the Waiver.
9.03 - Execution of the Agreement
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE 10 - Parties
10.01 - Rights of Parties
Nothing in this Agreement, whether express or implied, is intended
to confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
shall any provisions give any third persons any right of subrogation or action
over or against any party to this Agreement.
10.02 - Assignment
This Agreement shall be binding on, and shall inure to the benefit
of the parties to it and their respective heirs, legal representatives,
successors, and assigns; provided, however, Buyer may not assign any of its
rights under it, except to a wholly owned +subsidiary corporation of Buyer. No
such assignment by Buyer to its wholly owned subsidiary shall relieve Buyer of
any of its obligations or duties under this Agreement.
ARTICLE 11 - Remedies
11.01 - Arbitration
Any controversy or claim arising out of or relating to this
Agreement, or the making, performance, or interpretation thereof, shall be
settled by arbitration in San Diego, California in accordance with the Rules of
the American Arbitration Association then existing, and judgement on the
arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy.
11.02 - Time is of the Essence
Time is of the Essence in this Agreement.
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ARTICLE 12 - Nature and Survival of Representations and Obligations
12.01 - Effect of Closing
All representations, warranties, covenants, and agreements of the
parties contained in this Agreement, or in any instrument, certificate, opinion
or other writing provided for in it, shall survive the closing.
ARTICLE 13 - Notices
All notices, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
To Seller: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tri-National Holdings, S.A. de C.V..
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
To Buyer: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Care International S.A. de C.V.
▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Either party may change its address for purposes of this paragraph
by giving the other party written notice of the new address in the manner set
forth above.
ARTICLE 14 - Governing Law
This Agreement shall be construed in accordance with, and governed
by, the laws of the State of California.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it on the 30th day of April 2001.
SELLER:
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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BY: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Tri-National Holdings, S.A. de C.V..
BUYER:
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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BY: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Senior Care International S.A. de C.V. .
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