AGREEMENT
This Agreement is made and entered into as of the ___ day of
___________, 1998, by and between LOS XXXX FARMS, INC., a California corporation
("Los Xxxx"), and M & R INVESTMENT COMPANY, INC., a Nevada corporation ("M &
R").
RECITALS
WHEREAS, Los Xxxx granted an option to purchase certain real property
located in Xxxxxx County, California (the "Option Property"), to Baby Grand
Corp., a Nevada corporation ("Baby Grand"), pursuant to an Option Agreement
dated April 30, 1993 (the "Option Agreement"), in consideration for the sum of
One Million Dollars ($1,000,000.00) (the "Option"); and
WHEREAS, a Memorandum Option was recorded August 10, 1993, in the
Official Records of Xxxxxx County, California as Instrument No. 1993 - 00072641;
and
WHEREAS, Baby Grand sold, assigned and conveyed to M & R, with the
consent of Los Xxxx, all of its right, title and interest in and to the Option
Agreement, including but not limited to its right, title and interest in and to
the Option Property, pursuant to a Purchase Agreement dated as of February 9,
1995; and
WHEREAS, a Memorandum of Purchase and Assignment of Option was recorded
March 20, 1995 in such Official Records as Instrument No. 1995-00016318, and a
Quitclaim Deed from Baby Grand to M & R was recorded March 20, 1995 as
Instrument No. 1995 - 00016319; and
WHEREAS, the Option has not been exercised, and Los Xxxx still holds
good and marketable title to the Option Property; and
WHEREAS, Los Xxxx now desires to buy the Option back from M & R, thus
effecting a termination of the Option; and
WHEREAS, M & R is willing to sell and assign the Option to Los Xxxx, on
the terms and conditions, and based upon the representations and covenants, set
forth in this Agreement.
NOW, THEREFORE, for and in consideration of the covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereby agree as follows:
1. Sale and Buy-Back of the Option. Subject to the terms and conditions
set forth in this Agreement, M & R shall sell, assign and convey to Los Xxxx,
all of its right, title and interest in, to
and under the Option Agreement, including but not limited to any right, title or
interest it may have in the Option Property (the "Option Rights"), and Los Xxxx
shall purchase, assume and acquire the Option Rights.
2. Termination of the Option. The Option and the Option Rights shall
automatically terminate without any further action or documentation upon
completion of all acts necessary to be performed at and conditions precedent to
the Closing (as defined below), and Los Xxxx shall thereafter own the Option
Property free and clear of the Option.
3. Consideration. The consideration for M & R's sale, assignment and
conveyance of the Option Rights shall be (i) Los Xxxx' covenant with respect to
sale of the Option Property specified at Section 8. B. below, and (ii) the sum
of Five Hundred Thirty-Three Thousand, Three Hundred Thirty-Three Dollars and
33/100 Cents ($533,333.33) (the "Consideration"), payable as follows:
A. At the Closing (as defined below), Los Xxxx shall pay to M & R
the sum of Five Hundred Thousand Dollars ($500,000.00) in cash (the "Cash
Consideration"); and
B. At the Closing (as defined below), Los Xxxx shall deliver to M
& R a Promissory Note, payable to M & R, in the amount of Thirty-Three Thousand,
Three Hundred Thirty-Three Dollars and Thirty-Three Cents ($33,333.33), plus
interest at the rate of Eight Percent (8%) per annum (the "Note"). The Note
shall be in form of and include the terms and conditions set forth the
promissory note attached hereto as Exhibit A.
4. Closing. The Closing shall, unless extended by written agreement of
the parties, occur on or before one hundred twenty (120) days from the execution
of this Agreement (the "Closing"), at such place and time as shall be agreed to
by the parties.
5. Escrow; Title Insurance Policy. Upon full execution of this
Agreement, Los Xxxx may open an escrow with Placer Title Co. having an address
of Davis, California (the "Escrow Agent") to complete the transaction
contemplated by this Agreement. If Los Xxxx elects to open the escrow, M & R
will cooperate with Los Xxxx in the preparation and submission of mutually
acceptable escrow instructions and other documents as may be requested by Escrow
Agent, but Los Xxxx shall pay any and all escrow fees. In addition, Los Xxxx
shall take any and all action necessary to obtain a policy of title insurance,
as described in Section 6(B)(5) of this Agreement, and shall pay any and all
fees and costs associated therewith.
6. Conditions Precedent.
A. M & R's obligation to sell and convey the Option Rights to Los
Xxxx shall be expressly conditioned upon the following conditions precedent to
Closing:
(1) Los Xxxx' payment of the Cash Consideration at Closing;
(2) Los Xxxx' delivery of the Note at Closing;
(3) Los Xxxx' compliance with all of the terms and provisions of this
Agreement which must be complied with at or prior to Closing;
(4) Los Xxxx' delivery to M & R, at or before the Closing, of evidence of
capacity and other authority and such other documents reasonably requested by M
& R; and
(5) Issuance by Placer Title Company, at the Closing, of a CLTA owners'
policy of title insurance to Los Xxxx, in the amount of $533,000, insuring that
title to the Option Property is free and clear of the Option.
B. Los Xxxx' obligation to pay the Consideration to M & R is expressly
conditioned on the following conditions precedent to the Closing
(1) M & R's delivery to Los Xxxx, at Closing, of an
Assignment of Option Rights, in the form attached hereto as
Exhibit B; and
(2) M & R's delivery of a Quitclaim Deed in the form
attached hereto as Exhibit C;
(3) M & R's delivery to Los Xxxx, at or before the
Closing, of evidence of capacity and other authority and such
other documents reasonably requested by Los Xxxx; and
(4) M & R's compliance with all of the terms and
conditions of this Agreement which must be complied with prior to
the Closing.
7. Los Xxxx' Representations and Warranties. Los Xxxx hereby represents
and warrants to M & R as follows, which representations and warranties shall be
deemed made as of the date of this Agreement and as of the Closing, and the
effectiveness of such representations and warranties as of the Closing shall
survive the Closing:
A. Los Xxxx is a corporation organized and in good standing under the laws
of the State of California.
B. The person executing this Agreement for and on behalf of Los Xxxx has
been duly authorized and empowered by Los Xxxx to execute this Agreement on its
behalf and upon such execution the terms and provisions of this Agreement shall
be valid and binding obligations of Los Xxxx.
C. Los Xxxx is not now offering the Option Property for sale or
negotiating a sale of the Option Property, and has no plans to do so.
8. Los Xxxx' Covenants.
A. As of and after the Closing, Los Xxxx shall indemnify, defend,
and hold harmless M & R, its assigns and transferees, and each of their
respective representatives, employees, trustees, officers, directors and agents
(collectively, the "Indemnified Parties"), from and against any and all claims,
judgments, damages, penalties, fines, costs, expenses, liabilities or losses
(including, without limitation, sums paid in settlement of claims, attorneys'
fees, consultant fees and expert fees) which M & R or any other Indemnified
Party may incur or suffer as a result of (i) any misrepresentation made herein
by Los Xxxx or any of its members, officers, directors, employees or agents,
(ii) any breach of any provision set forth herein by Los Xxxx or any of its
members, officers, directors, employees or agents, or (iii) M & R's sale of, or
Los Xxxx' buy-back of the Option.
B. Los Xxxx expressly acknowledges that M & R paid $1,000,000 for
the Option, and that M & R has only agreed to accept the Consideration based on
representations made by Los Xxxx' principal(s) that Los Xxxx could not pay more
than $533,333.33 for the Option, and that Los Xxxx had no plans to and would not
sell the Option Property to a third person after the Closing. Therefore, Los
Xxxx expressly covenants and agrees that neither it, nor any of its successors
or assigns, shall, prior to the Closing and for a period of nine months after
the Closing, offer the Option Property for sale, negotiate with anyone with
respect to the sale of the Option Property, enter into any contract for sale of
the Option Property, sell or convey the Option Property, or grant an option in
the Option Property.
C. At and after the Closing, Los Xxxx shall execute any and all
other documents which the parties determine are reasonably necessary to
consummate the transactions contemplated by this Agreement.
9. M & R's Representations and Warranties. M & R hereby represents and
warrants to Los Xxxx as follows, which representations and warranties shall be
deemed made by M & R as of the date of this Agreement and as of the Closing, and
such representations and warranties shall survive the Closing:
A. M & R is a corporation formed and in good standing under
the laws of the State of Nevada;
B. The person executing this Agreement on behalf of M & R is
authorized to execute this Agreement and upon such execution the terms and
provisions of this Agreement shall be valid and binding obligations of M & R.
C. M & R is now, and immediately prior to close of escrow will
be, the owner of the Option and the Option Rights.
D. M & R has not sold, transferred, assigned, pledged,
encumbered, or hypothecated its interest in the Option Property, and has no
plans to do so except as stated herein.
10. M & R's Covenants.
A. As of and after the Closing, M & R shall indemnify, defend and
hold harmless Los Xxxx and its officers, directors, employees and agents from
and against any and all claims, judgments, damages, penalties, fines, costs,
expenses, liabilities, or losses (including, without limitation, sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees) which
Los Xxxx or any of its officers, directors, employees or agents may incur or
suffer as a result of (i) any misrepresentation made herein by M & R or any of
its officers, directors, employees or agents, or (ii) any breach of any
provision set forth herein by M & R or any of its officers, directors, employees
or agents.
B. At and after the Closing, M & R shall execute any and all
documents which the parties determine are reasonably necessary to consummate the
transactions contemplated by this Agreement.
11. Default. If Los Xxxx defaults in its performance of or under this
Agreement or the Note, M & R shall have all rights and remedies available to it
under California law or in equity.
12. Notices. Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to either party
by the other party or by Escrow Agent shall be in writing and shall be deemed
duly served and given when personally delivered to the party to whom such notice
or communication is directed, or in lieu of personal service when deposited in
the United States mail, first-class postage prepaid, or by overnight courier,
addressed as follows:
If to Los Xxxx: Los Xxxx Farms, Inc.
P. O. Xxx 0000
Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, President
Fax No. (000) 000-0000
If to M & R: M & R Investment Company, Inc.
c/o Xxxxxx Xxxxxxxx, President
0000 Xxxxxxxxx Xxxx., Xxx. 000
Xxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
Each party may change its address for the purposes of this Paragraph 12 by
giving written notice of the change to the other party in the manner provided
for in this paragraph.
13. Attorneys' Fees. Each party shall bear its own attorneys' fees and
costs incurred in connection with the negotiating and drafting of this
Agreement. If any litigation or arbitration action is commenced by one of the
parties against the other concerning this Agreement, or the rights and duties of
either in relation thereto, the party prevailing in such litigation or
arbitration shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum as and for attorneys' fees and expenses incurred in
connection with such litigation or arbitration, which amount shall be determined
by the court in such litigation or arbitrator in such arbitration, or in a
separate action brought for that purpose.
14. Governing Law. This Agreement shall be construed under and in
accordance with the laws of the State of California, without regard to choice of
law principles.
15. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and permitted assigns.
16. Severability. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal and
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
17. Entire Agreement; Modification. This Agreement, the Assignment of
Option Rights, the Note, and the Quitclaim Deed constitute the sole and only
agreement of the parties hereto and supersedes any prior understandings or
written or oral agreements between the parties respecting the within subject
matter and cannot be modified, amended or any way changed except by their
written consent.
18. Assignment; Nomination of Another Party for Title. Neither party
shall have the right to assign its rights and obligations.
19. Counterparts; Fax Transmission. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which, taken
together, shall constitute one and the same instrument. This Agreement may be
executed and delivered by exchange of facsimile copies, and the facsimile copies
will constitute originally signed copies of this Agreement until such time as
applicable pages bearing non-facsimile signatures are obtained from the relevant
party or parties.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
"Los Xxxx"
LOS XXXX FARMS, INC.,
a California corporation
By:
Xxxxxxx Xxxxxx, President
"M & R"
M & R INVESTMENT COMPANY, INC.,
a Nevada corporation
By:
Xxxxxx Xxxxxxxx, President
