EXHIBIT 10ii - AGREEMENT FOR DEVELOPMENT OF PROPERTIES
AGREEMENT FOR DEVELOPMENT OF PROPERTIES ENTERED INTO BY SENIOR
CARE INDUSTRIES, INC., HEREINAFTER REFERRED TO AS "SENIOR" AND
GOLD COAST, S.A. DE C.V., HEREINAFTER REFERRED TO AS "GOLD
COAST", IN ACCORDANCE WITH THE FOLLOWING STATEMENTS AND
CLAUSES:
STATEMENTS:
THE PARTIES HERETO STATE THAT:
I. - On May 29, 2002, Xxxx Xxxxxxxxxx Xxxxxx and Xxxxx Xxxxxxxxxx Xxxxxx
executed a stock purchase agreement for the transfer of the shares of Senior in
Senior Care International, S.A. de C.V., hereinafter referred to as the Stock
Purchase Agreement.
II. - Xxxx Xxxxxxxxxx Madera and Xxxxx Xxxxxxxxxx Xxxxxx subsequently assigned
their shares in Senior Care International, S.A. de C.V. to Gold Coast, a duly
organized Mexican corporation.
III. - The contracts for deed referred to in the Stock Purchase Agreement, which
were executed by Senior Care International, S.A. de. C.V. are as follows:
a) Contract for deed executed on April 30, 2001, between Senior Care
International, S.A. de C.V. and Tri-National Holdings, S.A. de C.V. for plus 15
acres of the beach front property, known as Plaza Rosarito and 9 acres of
developed property including approximately 170,000 square feet of existing
commercial space known as the Plaza Sol, hereinafter referred to jointly as
"Plaza Sol".
b) Contact for deed executed on April 30, 2001, between Senior Care
International, S.A. de C.V. and Tri-National Portal, S.A. de C.V. for a 66
2/3rds interest in the Portal Del Mar, 112 unit 2 and 3 bedroom partially
completed condominium development located on approximately 6 acres of land
overlooking the Pacific Ocean in Baja California, Mexico, hereinafter referred
to as "Portal Del Mar".
c) Contract for deed executed on April 30, 2001, between Senior Care
International, S.A. de C.V. and Inmobilaria Plaza Baja California, S.A. de C.V.
for approximately 16 acres of oceanfront land known as Plaza Resort hereinafter
referred to as "Plaza Resort".
d) Contract for deed executed April 30, 2001, between Senior Care International,
S.A. de C.V. and Planificacion y Desarolles Regional de Jatay, S.A. de C.V. for
650 acres of property known as the Hills of Bajamar hereinafter referred to as
the "Hills of Bajamar".
IV. - The purpose of this agreement is to regulate the relationships between the
parties for the transfer of title and development of the contracts for deed for
various properties acquired by Senior Care International, S.A. de C.V. as per
Clause Fifth of the Stock Purchase Agreement.
V. - Gold Coast has executed promissory notes in favor of Senior to guarantee
payment of the shares transferred to Gold Coast hereinafter referred to as the
"Promissory Notes".
PURSUANT TO THE ABOVE, THE PARTIES AGREE AS FOLLOWS:
CLAUSES:
FIRST. - The parties agree that hsould the final purchase price for the
properties referred to in Statement III herein be reduced from the current total
amount of $70,299,055 U.S. dollars, the promissory notes plus interest due as
described in the Stock Purchase Agreement will be reduced in the same proportion
as the amounts payable under the contracts for deed.
SECOND. - Senior and Gold Coast agree that Gold Coast will not transfer, assign
or encumber the properties or place Senior Care International, S.A. de C.V. in
bankruptcy without consent from Senior, consent of which shall not be
unreasonably withheld. For the purposes of this agreement, Gold Coast will not
be considered as having transferred or assigned its properties included in the
contracts for deed if such transfer is done to a related party for the sole
purpose of obtaining funds for the development of such properties.
THIRD. - Gold Coast shall be entitled to a reimbursement of any amounts paid for
the contracts for deed and the cancellation of any related promissory notes and
interest if the properties contained in such contracts cannot be developed due
to development constraints. Never-the-less, such right will only apply to the
specific property that cannot be developed and will not apply to any other
properties. For the purposes of this Clause, development constraints will be
considered as any action or event which does not allow the development of the
properties at Gold Coast's sole discretion.
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The right to reimbursement and/or cancellation of the promissory notes and
accumulated interest may be exercised at any time within 45 days before such
promissory notes are due and payable.
Should Gold Coast decide to exercise the rights described in this Clause, Gold
Coast shall retain an undivided interest of 10% in any profits generated from
the properties developed thereafter by Senior or parties other than Gold Coast.
FOURTH. - The parties agree that there is a debt of $600,000 U.S. on Portal Del
Mar and that such amount will be paid 50% by Senior and 50% by Gold Coast.
FIFTH. - The parties agree that there is currently a lien on Plaza Resort in the
amount of $9,079,055 U.S. but that there is a question as to the actual validity
of the lien. Thereto, Gold Coast agrees to carry out any actions necessary to
remove such lien so that the full value may be paid to Senior.
If the lien cannot be removed, the agreed purchase price shall be modified
to be a maximum of $9,079,055 U.S. or a minimum of $8,000,000 U.S., if the
amount of the lien be reduced.
SIXTH. - The parties agree that Senior has the right to purchase an additional
1,750 acres in the Hills of Bajamar. Such contract and rights will be assigned
to Gold Coast in accordance with the same contract. The parties further agree
that each one will contribute 50% of the acquisition costs for any such
additional land and that any profits received form the same will be divided
based on the actual contribution made to the acquisition costs of such
properties.
If for any reason Senior cannot assign such contract or rights, the parties
agree that the acquisition costs and profits will still be divided as described
in this Clause.
SEVENTH. - Gold Coast agrees that immediately upon obtaining title to any of the
properties referred to in Statement III, it will secure payment of the
promissory notes issued to Senior, by executing a guarantee trust agreement or
other lien in favor of Senior or assignee as per instructions provided to Gold
Coast at such time. Failure by Gold Coast to grant suchlien will be considered a
cause of default and authorize Senior to execute the lien on the shares of
Senior Care International, S.A. de C.V. pledged in its favor by Gold Coast.
EIGHTH. - The parties agree that there exist payments and redemption obligations
in the amount of approximately $11,262,401 U.S. to various bondholders with
regard to the Hills of Bajamar. There is also an obligation to pay such
bondholders a cumulative preferred return on their equity of 10% per year.
The parties agree that should such obligations survive upon the transfer of
title of the propertie, the purchase price of the Hills of Bajamar shall be a
minimum of $12,500,000 U.S. of the combined amounts of the outstanding
obligation to the Hills of Bajamar bondholders, plus the accrued interest, to a
maximum of $16,500,000 U.S.
NINTH. - The parties agree that the entities which sold the properties referred
to in the Contracts for Deed are entitled to the following profit participation:
a) 12% of the profits from Plaza Resort, which reduces to 7.5% after the
convertible preferred shares are paid, as described in the corresponding
contract for deed;
b) 12% of the profits from Plaza Sol, which reduces to 7.5% after the
convertible preferred shares are paid, as described in the corresponding
contract for deed;
c) 12% of the profits from Portal Del Mar, which reduces to 7.5% after the
convertible preferred shares are paid, as described in the corresponding
contract for deed;
d) 7.5% of the profits from Hills of Bajamar as described in the corresponding
contract for deed.
The payment for such amounts will be the responsibility of Senior and shall not
diminish in any way Gold Coast's share of the profits from such properties.
TENTH. - The parties recognize that controversy exists with regard to the
contracts for deed pertaining specifically to title, liens and claims of third
party ownership. All legal expenses and costs required to protect the rights
contained in the contracts for deed will be paid by Senior to Gold Coast on a 45
day billing cycle from the time the services are billed by corresponding
attorneys.
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Senior further agrees to deposit $100,000 U.S. into an account in the name of
Senior Care International, S.A. de C.V. which shall be used for legal costs and
expenses as well as any other related costs and expenses required to accomplish
the transfer of title to the properties contained in the contracts for deed. The
parties agree that such expenses shall not exceed $60,000 U.S. and that the
remainder shall be used at Gold Coast's discretion for the development of the
properties.
ELEVENTH. - The parties agree that the profits from the sale or development of
the properties contained in the contracts for deed shall be divided in half for
each party if Gold Coast has provided directly or indirectly the funds required
to develop such properties. If Senior obtains such funds and prefects the title
to the properties in favor of Senior Care International, S.A. de C.V. or other
related party, Senior shall be entitled to 90% of the corresponding profits and
the remaining 10% will correspond to Gold Coast.
TWELFTH. - The parties acknowledge that Countywide Lenders Corp. or its assignee
is owed a 2.5% commission on the total purchase price for the contracts for deed
based upon a sale price of $56,079,055 U.S., held by Senior Care International
S.A. de C.V. and that such amount ($1,401,976) shall be paid out of the first
profits generated from the properties contained in the contracts for deed.
THIRTEENTH. - The parties ratify that there will be a 6% yearly interest due on
the promissory notes referred to herein. Never-the-less, should Gold Coast
provide the required funds for the development of the properties described in
the contracts for deed, then the interest calculation shall be changed to 6% per
year of the value of the Senior Care convertible preferred stock actually issued
in payment as described in the contracts for deed.
The value of such shares shall be calculated by multiplying the number of shares
issued by the market price of the stock on the day of issuance. The interest
will begin on the date of such issuance of the stock and end upon payment of the
corresponding amount for each of the properties. The basis for interest
calculations will be reduced by any partial principal reductions by Gold Coast.
FOURTEENTH. - For purposes of this agreement, the parties state that its
domiciles are located at the following places:
SELLER: 000 Xxxxxxxx, 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000-0000 U.S.A.
BUYER: Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx Mision San Diego 2937-301
Xxxx Xxx Xxxxxxx
00000 Xxxxxxx Xxxx Xxxxxxxxxx
The parties shall amend their domiciles with prior written notice of the other
party.
FIFTEENTH. - Every notice required or contemplated by this agreement by either
party shall be deemed to have been given only if in writing and delivered by
either (i) personal delivery, or (ii) telex or facsimile with confirmation copy
sent to the party postage prepaid, addressed to the party for whom intended at
the address set forth in the clause above mentioned or at such other address the
intended recipient, previously shall have designated by written notice to the
other party. Notice by telex or fascimile confirmed by airmail or postage
prepaid, shall be deemed to have been duly given on the date it is transmitted.
SIXTEENTH. - For the interpretation and performance of this agreement, the
parties hereto expressly agree to submit themselves to the jurisdiction of the
competent courts and laws in the City of Tijuana, Baja California, Mexico,
expressly waiving any other venue that may correspond to them by virtue of their
present or future domiciles, or for any other reason whatsoever.
SEVENTEENTH. - This agreement is executed in Spanish and English translation. In
case of any dispute for the construction or interpretation of this agreement,
the Spanish version shall prevail.
THIS AGREEMENT is executed in the places and date set forth herein below:
SELLER: BUYER:
SENIOR CARE INDUSTRIES, INC. GOLD COAST, S.A. de C.V.
By: /s/ Xxxxx X. Xxxxx /s/ Xxxx Xxxxxxxxxx Xxxxxx
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Xxxxx X. Xxxxx, President Xxxx Xxxxxxxxxx Xxxxxx
Laguna Beach, California Managing Director
May 29, 2002 Tijuana, Baja California
May 29, 2002
