1
Exhibit 10.27
LETTER OF UNDERSTANDING
MEMBERSHIP INTEREST PURCHASE & PURCHASE OPTION AGREEMENT
MEMBERSHIP INTEREST PURCHASE & PURCHASE OPTION AGREEMENT ("Agreement"),
made as of the 14th day of December, 1996, by and between Senior Tour Players
Development, Inc., a Nevada corporation with a principal place of business at
000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000 ("STPD"), and Xxxx Xxxxxxx, an individual
investor with a business address at 0000 Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx
Xxxxx, Xxxxxxx 3341-8105.("Fireman" or "Buyer").
RECITALS:
---------
WHEREAS, STPD, upon approval from its Board of Directors, shall enter into
an agreement to purchase beneficial and record interests in Las Vegas Golf
Center, LLC ("LVGC") of 21.5% from Xxxxx X. Xxxxx and Xxxxxx Xxxxx, which
purchase will be consummated prior to or simultaneously with the consummation of
the transaction contemplated by this Agreement; and
WHEREAS, STPD, upon approval from its Board of Directors, shall enter into
an agreement to purchase beneficial and record interests in LVGC of 48.5% from
Xxxxxx X. Xxxxxxx, an individual, Xxxxxx X. Xxxxxxx, an individual, and Xxxxxx
X. Xxxxxxx, XX, an individual, which purchase will be consummated prior to or
simultaneously with the consummation of the transaction contemplated by this
Agreement; and
WHEREAS, Buyer wishes to purchase from STPD and STPD desires to sell to
Buyer beneficial and record interests in LVGC of 48.5%; and
WHEREAS, STPD wishes to have a 3-year option to repurchase from Buyer
beneficial and record interests in LVGC of 13.5%; and
WHEREAS, Buyer desires to be admitted to LVGC as an individual member
thereof;
NOW THEREFORE, in consideration of the mutual convenants, promises, and
consideration hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, STPD and Fireman
(together the "Parties") hereby agree as follows:
2
1. STPD shall enter into a purchase agreement with Xxx Xxxxx and Xxxxx Xxxxx for
the purchase of beneficial and record interests in LVGC of 21.5% on the terms
and conditions contained in that certain purchase agreement dated November 29,
1996.
2. STPD has or will enter into a purchase agreement to purchase beneficial and
record interests in LVGC of 48.5% from Xxxxxx X. Xxxxxxx, an individual, Xxxxxx
X. Xxxxxxx, an individual, and Xxxxxx X. Xxxxxxx, XX, an individual, on the
terms and conditions contained in that certain purchase agreement dated
December 11, 1996.
3. STPD agrees to sell to Buyer, and Buyer agrees to purchase from STPD
beneficial and record interests in LVGC of 48.5%. The aggregate purchase price
to be paid by Buyer for the 48.5% interest shall be $2,167,993 cash
consideration payable at closing.
4. In consideration of receiving 50,000 shares of unregistered common stock of
STPD, Buyer agrees to grant STPD an option to purchase from Buyer a 13.5%
membership interest in LVGC. The purchase option shall be on the following terms
and conditions:
a. During the thirty-six month period following the acquisition by Buyer of
the 48.5% LVGC membership interest, STPD shall have the option to purchase from
Buyer beneficial and record interests in LVGC, of not more than 13.5% on the
following terms:
i. If STPD shall exercise its purchase option on or before December 31,
1997, STPD shall pay Buyer $900,000 total cash consideration for beneficial and
record interests in LVGC of 13.5%.
ii. If STPD shall exercise its purchase option after December 31, 1997 but
on or before December 31, 1998, STPD shall pay Buyer $1,075,000 total cash
consideration for beneficial and record interests in LVGC of 13.5%.
iii. If STPD shall exercise its purchase option after December 31, 1998 but
on or before December 31, 1999, STPD shall pay Buyer $1,350,000 total cash
consideration for beneficial and record interests in LVGC of 13.5%.
5. During any calendar year in which STPD exercises the purchase option
described in paragraph 4 herein, the cash flow distributed or distributable from
LVGC to
3
Buyer and STPD shall be pro rated among the Parties by taking the total annual
LVGC cash flow during the year the option is exercised and pro rating such cash
flow between Fireman and STPD based on the weighted average % of beneficial
interest held during the year by each of the Parties.
AGREED TO AND ACCEPTED:
SENIOR TOUR PLAYERS DEVELOPMENT, INC.
-------------------------------------
By: Xxxxxxx X. Xxxxxx, President
BUYER
/s/ Xxxxxx Xxxxxx
-------------------------------------
Xxxx Xxxxxxx By: Xxxxxx Xxxxxx