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During the period when Weaver and Hyatt were disputing the
computation of Weaver's share of the management fees, Kanter and
Weaver agreed that IRA would purchase the stock of KWJ Corp. In
a letter to Kanter dated March 10, 1976, Weaver confirmed "our
understanding regarding my granting to your client a right to
purchase all of the outstanding shares of stock of KWJ Corp." for
$150,000. The letter further provided that in addition to the
purchase price for the KWJ Corp. stock, KWJ Corp. would continue
to engage Weaver as its president and chief operating officer.
In addition, Weaver was to receive 30 percent of all payments
made by Hyatt Corp. under the contract with KWJ Corp. for as long
as the contract was in existence, regardless of whether he
performed any services for KWJ Corp.
At that time, Hyatt Corp. was in the process of becoming
privately owned, and Kanter did not want the transfer of the KWJ
Corp. stock to take place until after Hyatt Corp. became
privately owned. Therefore, the agreement was framed as an offer
to sell the stock for a period of 4 years.
On March 14, 1977, Hyatt Corp. paid KWJ Corp. $54,848 for
fees earned during 1976. Sometime prior to November 1978, Hyatt
Corp.'s management contract with the hotel was modified, and
Hyatt Corp. wanted to revise its agreement with KWJ Corp. By
letter dated November 14, 1978, Hyatt Corp. notified Weaver that,
under the proposed change, KWJ Corp. would have been overpaid by
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