STIPULATION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF 2865 COLEMAN WITH OVERBID PROCEDURES AND ORDER

JAMES C. MAHAN, District Judge.

This Stipulation for Order Authorizing, Approving and Confirming Sale of 2865 Coleman with Overbid Procedures (the "Stipulation") is made by and between Robb Evans & Associates LLC as the Receiver ("Receiver") on the one hand, and defendants Edwin Fujinaga ("Fujinaga"), MRI International, Inc. ("MRI"), and their affiliated entities (collectively, the "Defendants", and together with the Receiver, the "Parties") on the other hand, each by and through their counsel.

The Parties hereby stipulate and agree that:

RECITALS

A. On January 27, 2015, the Clerk of Court entered judgment against the Defendants (Dkt. 189) ("Judgment") pursuant to the Court's order granting summary judgment in favor of the Securities and Exchange Commission ("SEC"), plaintiff herein.

B. On February 23, 2015, the Court issued its Order Appointing an Equitable Receiver (Dkt. 194) ("Appointment Order") pursuant to which the Receiver was appointed as receiver for various commercial properties and their rents and profits (defined in the appointment order as the "Properties") as more fully set forth in the appointment order.

C. On February 25, 2015, the Court issued its Rule 54(b) Certification (Dkt. 195) pursuant to which the judgment was made the final judgment as to the Defendants.

D. On May 15, 2015, the Receiver's duties and responsibilities were enlarged by that certain Order Appointing a Full Equitable Receiver to Assume Control over the Defendants' Assets and Enforce the Final Judgment (the "Order Appointing Receiver") entered on May 15, 2015 (Dkt. 226). The Order Appointing Receiver supersedes the Appointment Order, and directs the Receiver to take and retain immediate possession, custody, and control of all assets owned or controlled, directly or indirectly, by any of the Defendants in this case, including CSA Service Center, LLC, a Relief Defendant herein. Id.

E. Pursuant to the Order Appointing Receiver, the Receiver is currently in possession, custody, and control of the real property located at 2865 Coleman Street, North Las Vegas, Nevada 89032 (the "2865 Coleman") and identified by the Clark County Assessor as parcel no. 139-17-610-007.

F. 2865 Coleman is a vacant commercial property with approximately 28,366 square foot of leasable space, located on approximately 1.39 acres. Title to 2865 Coleman is held in the name of Relief Defendant CSA Service Center, LLC.

G. The Parties agree that it makes economic sense to sell 2865 Coleman, as (a) it is not needed due to the termination of the business formerly conducted at 2865 Coleman; and (b) selling the property will eliminate expenses related to owning and safeguarding 2865 Coleman and the ongoing risk, attendant to some degree to all vacant properties, of theft, break-ins and vandalism.

H. 2865 Coleman was subject to liens for accruing real property taxes and other liens including judgment liens. The Receiver has already satisfied most or all real property liens, but to the extent any real property liens remain, these will be satisfied along with property taxes accrued through the date of closing, at the time of closing.

I. On June 5, 2015, the Receiver entered into an exclusive right to sell listing agreement and agency disclosure ("Listing Agreement") with Donna Anderson of CBRE, Inc. ("Broker") a true and correct copy of which is attached as Exhibit 1 hereto. The Broker is experienced in the sale of commercial real estate in Southern Nevada. 2865 Coleman was formally listed for sale with a listing price of $2,358,800.00.

J. The Broker listed 2865 Coleman for sale with the following services:

K. In determining the listing price, the Receiver relied on two appraisals of 2865 Coleman, and a broker's opinion of value obtained by the Receiver of July 9, 2015, as well as the Receiver's Broker's analysis of and recommendations regarding a listing price for 2865 Coleman.

L. The Parties previously entered into a Stipulation for Order Authorizing. Approving and Confirming Sale of 2865 Coleman with Overbid Procedures (the "First Stipulation"), which First Stipulation was approved by order of this Court entered on October 16, 2015 (Dkt. 278).

M. The sale of 2865 Coleman authorized by the First Stipulation did not close, however, as the proposed buyer in that contemplated sale failed to close the transaction and thereby forfeited its earnest money deposit to the Estate.

N. Accordingly, the Receiver re-listed the 2865 Coleman property for sale under the pre-existing Listing Agreement referenced hereinabove, and the Broker re-advertised the property with the services listed hereinabove.

O. On December 16, 2015, the Receiver received an all cash offer from SGPS Holdings LLC (the "Proposed Buyer") for $2,411,000.00 without any financing contingency to purchase 2865 Coleman, and the parties reached an agreement for the sale of 2865 Coleman pursuant to the Offer and Acceptance Agreement and Earnest Money Receipt attached as Exhibit 2 hereto (the "Offer and Acceptance Agreement").

P. The Receiver has obtained two independent appraisals of 2865 Coleman as well as a broker's opinion of value, and in the Parties' considered opinions, the sale of 2865 Coleman on the terms in the Offer and Acceptance Agreement is in the best interests of the receivership estate. In light of the proposed overbid session with a published notice, the Receiver has not disclosed the amount of these valuations of the property so as not to interfere with the overbid process;1 however, the purchase price of $2,411,000.00 under the Offer and Acceptance Agreement, while lower than the previous stipulated purchase price referenced in the First Stipulation, still exceeds the listing price and the minimum threshold for approval of a private sale of two-thirds of the average of three appraisals of the property as required under 28 U.S.C. § 2001.

Q. The Parties seek to sell 2865 Coleman under the Offer and Acceptance Agreement to the Proposed Buyer, who is an unaffiliated, arm's length purchaser based on the Receiver's investigation, subject to the Receiver's conduct of an overbid session after publication of notice to provide an additional opportunity for interested purchasers to bid for the property. The Offer and Acceptance Agreement provides for an "as is," all cash sale with the closing to occur, conditioned upon Court approval of this Stipulation, within 10 days of the conclusion of the overbid session.

R. The Parties agree that it is in the best interests of the receivership estate to sell 2865 Coleman on an "as is" basis more fully described in the sale contract documents by private sale either (a) to the Proposed Buyer pursuant to the Offer and Acceptance Agreement; or (b) to such higher qualified overbidder who hereafter submits the highest qualified overbid at a subsequent overbid session to be conducted under the terms and conditions more fully set forth herein.

S. The Parties hereby request and consent to approval of this Stipulation and confirmation of the sale of 2865 Coleman under the terms and conditions set forth herein as follows:

ORDER

1. The Stipulation, and all relief sought therein, is hereby APPROVED in its entirety;

2. The Parties' proposed sale and overbid procedures for the sale of 2865 Coleman are hereby authorized, and the Court hereby approves and confirms the sale of the 2865 Coleman on an "as is" basis more fully described in the sale contract documents by private sale either (a) to the Proposed Buyer, an arm's length buyer, at a purchase price of $2,411,000.00 pursuant to the Offer and Acceptance Agreement, or (b) to such higher qualified overbidder who hereafter submits the highest qualified overbid as a subsequent overbid session to be conducted under the terms and conditions more fully set forth herein:

3. The Receiver is hereby authorized to sell 2865 Coleman in accord with the Listing Agreement and the Offer and Acceptance Agreement which are hereby approved:

a. The overbid session shall be conducted within 30 days of the date of entry of the order approving this Stipulation. The overbid session will be conducted at the offices of Robb Evans & Associates LLC, 5560 S. Ft. Apache Road, Suite 120, Las Vegas, Nevada 89148,

b. The Receiver will cause to be published a notice of the proposed sale of 2865 Coleman to a qualified bidder at the overbid session to be conducted in accord with this Stipulation, which notice shall state the date, time and place of the overbid session, the requirement for pre-qualification by overbidders and the terms and conditions of the overbidding and sale of the property, as described below ("Overbid Notice"). The Receiver will cause the Overbid Notice to be published in Las Vegas Review Journal one time at least ten days prior to the scheduled overbid session date. The Las Vegas Review Journal is Nevada's largest newspaper, which serves all of Southern Nevada, and publishes daily.2,3 The Las Vegas Review Journal's circulation includes North Las Vegas, which is where 2865 Coleman is located.

c. Any person wishing to overbid at the overbid session shall be required to pre-qualify with the Receiver no later than 10:00 a.m. two business days preceding the overbid session by delivering to the Receiver's office located at 5560 S. Ft. Apache Road, Suite 120, Las Vegas, Nevada 89148: (a) notice in writing of the prospective overbidder's intent to overbid together with (b) written verification from a financial institution demonstrating to the Receiver's satisfaction, in the Receiver's sole opinion and judgment, the prospective overbidder's ability to complete and close a purchase of 2865 Coleman through sufficient funds or credit facilities within 10 days of the date of the overbid session, and (c) a cashier's check in the sum of $200,000.00 payable to "Robb Evans & Associates LLC, Receiver of MRI International, Inc. et al.", which cashier's check shall become non-refundable upon acceptance of the overbidder's overbid at the conclusion of the overbid session,

d. Overbidders biding at the overbid session will be deemed to have completed all inspections of 2865 Coleman and will be deemed to have waived and/or removed all contingencies in favor of the buyer under the Offer and Acceptance Agreement, including, without limitation any contingency pertaining to inspection of title, and will be required to complete a cash purchase of 2865 Coleman and close escrow for the purchase of 2865 Coleman within 10 days of the date of the overbid session. The successful overbidder will be required to execute a purchase agreement for 2865 Coleman substantially in the form of the Offer and Acceptance Agreement together with a waiver of all buyer contingencies promptly after conclusion of the overbid session,

e. The initial overbid shall be in the amount not less than $2,652,100.00 (an amount that is $241,100.00. or 10%, higher than the purchase price under the Offer and Acceptance Agreement), and all subsequent overbid shall be in an amount at least $25,000.00 higher than the preceding bid,

f. Pursuant to the Offer and Acceptance Agreement and the Listing Agreement with the Broker, a sales commission in the amount of 5% of the purchase price paid for 2865 Coleman by the Proposed Buyer, or if a higher overbid is received and accepted at the overbid session, by the wining overbidder, shall be paid from the proceeds of sale of 2865 Coleman at close of escrow and shall be paid to the Broker as listing agent under the Listing Agreement and a cooperating broker representing the buyer, if any, under the terms of the Listing Agreement;

4. The Receiver is authorized to execute all documents and instruments necessary or convenient to complete, implement, effectuate and close the sale of 2865 Coleman, including but not limited to the deed conveying title to 2865 Coleman;

5. The Receiver is authorized to permit and/or cause to be paid from the proceeds of sale all ordinary and customary closing costs, all costs and expenses required to be paid under the terms of the Offer and Acceptance Agreement by the seller from the proceeds of sale, all commissions provided for in the Offer and Acceptance Agreement, the Listing Agreement, and all real property liens and real property taxes due up to the date of closing; and

6. Notice of this Stipulation is deemed sufficient under Local Civil Rule 66-5 based on the service of this Stipulation on all known non-consumer creditors of the estate concurrent with the filing of this Motion with the Court, but not on the tens of thousands of potential foreign creditors.

IT IS SO ORDERED.