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EXHIBIT 10.26
LETTER AGREEMENT DATED FEBRUARY 15, 2007
BETWEEN
PARK-PREMIER MINING COMPANY AND RANCH 248 LLC
LETTER AGREEMENT
(Project “C” Joint Venture: Approximately 30
Acres)
February
15, 2007
This Letter Agreement
(“Agreement”) memorializes the agreement of the
undersigned, Park Premier Mining Company, a Utah corporation,
f/k/a Cummings Mining Company, a/k/a Park Premier Properties
(“Seller”), to enter into a joint venture with
Ranch 248 LLC or its designee (“Ranch 248”) with
respect to the development and sale of all of Seller’s
right, title and interest in and to approximately 30 acres of
land in Wasatch County, Utah, as described more particularly
in Exhibit “A” attached hereto (the
“Property”), upon the terms, conditions, and
covenants contained herein. Ranch 248 and Seller
are sometimes called the "Parties".
The joint venture
involving the development and sale of the Property shall
occur based on the following terms and
conditions:
A. BASIC
TRANSACTION
1.
Formation of Joint
Venture. Within five (5) calendar
days of execution of this Agreement by the Parties, this
Agreement shall be ratified by Seller's Board of
Directors. Thereafter within three (3) calendar
days of ratification of this Agreement by at least a majority
of the Seller's shareholders and satisfaction of the
conditions below (the “Formation Date”), the
Parties shall form a mutually-acceptable joint-venture entity
(e.g., limited liability company) domiciled in Utah (the
“Joint Venture Entity”) for the sole purpose of
developing and selling the Property, including the
construction of homes thereon (the “Project”),
and shall prepare and execute a definitive joint venture
agreement and/or charter documents (e.g., an operating
agreement) that reflect the terms and conditions of this
Letter Agreement (collectively, “Definitive JV
Agreement”). The obligation of Seller to close this
agreement and consummate formation of the Joint Venture
Entity on the Formation Date is subject to the satisfaction,
at or prior to the Formation Date, of the following
conditions:(a) Seller, associated third parties and Talisker
Realty Limited or assigns shall have entered into and
delivered copies of Letter Agreements (Project
“B,” and Project “A”: Approximately
303.1 Acres) mutually acceptable to the parties thereto; and
(b) the directors and shareholders of Seller shall have
approved and ratified this Agreement and Project
“A” as described above.
2.
Ownership and Management of Joint Venture
Entity. The Joint Venture Entity
shall be owned equally by Seller and Ranch 248, and shall be
managed and operated by three managers consisting of two
selected by Ranch 248 or its designee under this Agreement,
and one selected by Seller (collectively, the
“Managers”) in accordance with standards generally
applicable to real estate developers in the area; provided,
however, that the mutual consent
of
Seller and Talisker shall be required for any and all of the
following: (i) dissolution, termination, merger or consolidation of
the Joint Venture Entity; (ii) termination of this Agreement or the
Definitive JV Agreement, except as otherwise provided herein or
therein; (iii) any bulk sales of Joint Venture Entity assets
outside the ordinary course of business, or the sale, transfer or
conveyance of substantially all of the Joint Venture Entity’s
assets outside the ordinary course of business;
(iv) entry into the Joint Venture Entity of any new
member or owner (e.g., member, partner, shareholder); (v) the
transfer or sale of any ownership or membership interest in the
Joint Venture Entity (other than transfers to affiliates that
control, are controlled by, or are under common control with, the
transferring Party); (vi) borrowing money outside the ordinary
course of business from banks, other lending institutions, or the
Members, and in connection therewith, encumbering and granting
security interests in the assets of the Joint Venture Entity
outside the ordinary course of business to secure payments of the
borrowed sum; (vii) to pay or cause to be paid compensation to any
Member or the Managers outside the ordinary course of business or
other than as expressly set forth herein, and (viii) to increase
the number of, or replace the managers of the Joint Venture Entity,
except for a Member’s right to replace its own designated
Manager or Managers. No member of the Joint Venture
Entity may sell any portion of their ownership or membership
interest therein for a period of four (4) years following the
Formation Date. Thereafter, if a member receives a
bona-fide written offer to purchase its interest, such member shall
provide the other member with written notice of the offer together
with a copy of the offer, and the other member shall have the right
for a period of sixty (60) days after receipt of such notice to
elect to purchase the interest on the same terms and conditions as
those contained in the offer. If the other member fails
to make such election within said time period, then the selling
member may consummate the purchase and sale of its membership
interest pursuant to the terms and conditions of such
offer.
3.
Conveyance of Property.
Within three (3) business days of the Formation Date (the
“Contribution Date” or "Closing"), Seller shall
convey the Property “AS-IS,” except as otherwise
expressly provided in this Agreement, to the Joint Venture by
Special Warranty Deed. For purposes of this
Agreement and the transactions contemplated hereunder, the
Property shall be deemed to have a Property Value of
$3,500,000. At Closing, Seller may file a deed of
trust, collateral assignment of agreements, permits and
licenses, assignment of rents and profits, and security
agreement (collectively, the “Deed of Trust”) in
the amount of the Property Value. Seller agrees the lien of
its Deed of Trust will be subject, subordinate, junior and
inferior in all respects to the liens evidenced by and the
payments due under or in connection with any construction loan
or permanent financing provided, obtained or secured in
connection with development of the Property. At the request of
such lenders and without further consideration, Seller agrees
to execute, deliver and record such other documents, and take
such other action to confirm and effectuate the
foregoing.
4.
Ranch 248
Responsibilities. Ranch 248 shall
have the following responsibilities on behalf of and in
relation to the operation and management of the Joint Venture
Entity: (i) as soon as practicable following Closing but not
later than 18 months following Closing, create a business
& development plan that specifies development timing
parameters and that is consistent with the look and
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