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EXHIBIT 10.3
POST-CLOSING AND INDEMNITY AGREEMENT
THIS POST-CLOSING AND INDEMNITY AGREEMENT (this "AGREEMENT"), is made
and entered into as of the 19th day of August, 1997 by BANCOMER, S.A.,
INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO ("BANCOMER") in favor of the
Benefited Parties (as hereinafter defined). Unless otherwise specified, defined
terms herein shall have the respective meanings set forth in the Second Amended
and Restated Stock Purchase Agreement (the "PURCHASE AGREEMENT") dated as of
August 18, 1997, by and among Bancomer, Company, Buyer and CR Hotel.
RECITALS
A. Section 8.2 of the Purchase Agreement sets forth the conditions
("BUYER'S CONDITIONS") to Buyer's obligation to close the transactions
contemplated by the Purchase Agreement (the "TRANSACTIONS").
B. Bancomer and Buyer have agreed to consummate the Transactions,
although certain of Buyer's Conditions have not been satisfied as more
particularly described in the body of this Agreement (the "UNSATISFIED
CONDITIONS").
C. Buyer has agreed to consummate the Transactions, provided that
Bancomer agrees to use its best efforts to satisfy the Unsatisfied Conditions as
promptly as practicable following the date hereof.
D. Bancomer has agreed to indemnify and hold harmless each of the
Benefited Parties for any Damages suffered in the event that Bancomer fails to
satisfy the Unsatisfied Conditions.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Bancomer, intending to be legally
bound, hereby covenants and agrees with and for the benefit of the Benefited
Parties as follows:
(1) Definitions. As used in this Agreement, the following terms shall
have the following meanings unless the context otherwise requires. All other
capitalized terms used herein which are not in the Purchase Agreement or defined
below shall have the meanings as set forth in the Recitals or elsewhere in this
Agreement.
(a) "Amended NIZUC Trust" means the NIZUC Trust as amended and
restated in public instrument number 11,008, dated August 18, 1997, granted
before Xxxx X. Xxxxxx Patron, Esq., acting as alternate of Notary Public Xx. 00
xx Xxxxxx, Xxxxxxxx Xxx, Xxxxxx, registered in the Public Registry of Property
of Cancun, Xxxxxxxx Roo, Mexico.
(b) "Amended PRODEPA Trust" means the PRODEPA Trust as amended
and restated in public instrument number 15,181, dated August 18, 1997, granted
before
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Xxxxxxxxx X. Xxxx Xxxxxxx, Esq., acting as alternate of Notary Public Xx.
0 xx Xxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxx, registered in the Public Registry of
Property of Puerto Vallarta, Jalisco, Mexico.
(c) "Benefited Parties" means each entity in favor of which
Bancomer covenants to perform a specific obligation under the terms of this
Agreement.
(d) "Cabo Access Area" means the roadway depicted on the Cabo
Survey connecting the Cabo Condominium to the public highway known as the
"Caretera Trans-Peninsular.
(e) "Cabo Accreted Area" means the area outside and
immediately adjoining the Southerly boundary of the Cabo Condominium which
contains 5,957.78 square meters and is labeled as the "AREA GANADA AL MAR" on
the Cabo Survey.
(f) "Cabo Condominium" means the real property depicted and
described in the Cabo Survey.
(g) "Cabo Hotel Unit" means the condominium unit in the Cabo
Condominium consisting of the hotel currently known as the Xxxxxx Xxxxxx Cabo
San Xxxxx.
(h) "Cabo Survey" means that Levantamiento Topografico
(Planimetria) prepared by Surveyor, certified on August ____, 1997 which is a
survey of the Cabo Condominium.
(i) "Cabo Timeshare Unit" means the condominium unit in the
Cabo Condominium consisting of the vacation ownership interval operation.
(j) "Cabo Unlicensed Improvements" means the portion of the
swimming pool and two staircases which were constructed within the Cabo Accreted
Area.
(k) "Cancun Concession" means that Concesion No. DZF-064/93
issued to NIZUC by the Subsecretaria De Vivienda Y Bienes Inmuebles of the
Direccion General Del Patrimonio Inmobillario Federal, dated as of May 14, 1993.
(l) "Cancun Concession Area" means the strip of land ("area de
pedimento") legally described in the Cancun Concession in which the Cancun
Infringing Improvements are located.
(m) "Cancun Condominium" means the real property depicted and
described in the Cancun Survey.
(n) "Cancun Condominium Declaration" means the Declaration of
Condominium formalized under public instrument number 10,973, dated August 11,
1997, registered in the Public Registry of Property of Xxxxxxxx Roo, Mexico.
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(o) "Cancun Hotel Unit" means the condominium unit in the
Cancun Condominium consisting of the hotel currently known as the Xxxxxx Xxxxxx
Cancun.
(p) "Cancun Infringing Improvements" means the portions of the
improvements constructed upon the Cancun Hotel Unit and the Cancun Timeshare
Unit which are within the Cancun Concession Area as described in the Cancun
Concession and as more particularly depicted on the Cancun Survey which were
constructed without the requisite governmental license, outside the boundaries
of the Cancun Condominium.
(q) "Cancun Survey" means that Levantamiento Topografico
(Planimetria) prepared by Surveyor, certified on August _____, 1997, which is a
survey of the Cancun Condominium.
(r) "Cancun Timeshare Trust" means that trust agreement which
is public instrument number ______, dated as of August 18, 1997, granted before
Xxxxxxx Xxxxxx Xxxxx, Notary Public Xx. 000 xx xxx Xxxxxxx Xxxxxxxx, Xxxxxx,
among Bancomer, NIZUC and the Remainder Company.
(s) "Cancun Timeshare Unit" means the condominium unit in the
Cancun Condominium consisting of the vacation ownership internal operation.
(t) "Condominiums" means the Cabo Condominium, the Cancun
Condominium and the Puerto Vallarta Condominium.
(u) "Construction Costs" means all costs of construction,
including, without limitation, all architectural, engineering, demolition,
surveying, site preparation, landscaping and all such other direct and indirect
costs consistent with the general quality and esthetics of the improvements
located on the Cancun Condominium, Cabo Condominium and Puerto Vallarta
Condominium as deemed appropriate in the business judgment of any affected
Benefited Party.
(v) "Cozumel Land" means the land located in Cozumel, Mexico
owned by DTI Cozumel.
(w) "Xxxxx" means the law firm of Xxxxx, Xxxxxx-Xxxxxxx y
Xxxxxxxxxx.
(x) "Damages" means all damages, losses (including any
diminution in value, lost profits and costs of business interruption with
respect to any affected real property), liabilities (joint and several),
payments, obligations, penalties, claims, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses (including, without limitation
attorneys' fees) of any kind or nature whatsoever; provided, however, that such
Damages shall be limited to $41,000,000. Notwithstanding the foregoing, in the
event of the loss or destruction of any hotel room or timeshare unit, the total
Damages for which Bancomer shall be liable to the applicable Benefited Party for
such hotel room or timeshare unit shall be deemed to be the liquidated amount of
U.S. $150,000.
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(y) "DTP" means Desarollo Turistico Peninsular, S.A. de C.V.
(z) "Fonatur" means Patrimonio de Bienes Inmuebles Federales,
Nacional Financiera, Sociedad Nacional de Credito, como Fiduciario del Gobierno
Federal en el Fideicomiso denominado Fondo Nacional de Fomento al Turismo.
(aa) "Fonatur Acknowledgment" means that Letter emitted by
Fonatur dated August 14, 1997, addressed to NIZUC with respect to the correct
legal description of the Cancun Condominium.
(bb) "Maritime Zone" means the "Zona Federal Maritimo
Terrestre" as shown on the Surveys.
(cc) "NIZUC" means Promotora Turistica Nizuc, S. de X.X. de
C.V., formerly Promotora Turistica Nizuc, S.A. de C.V.
(dd) "NIZUC Trust" means that trust as amended and restated
pursuant to public instrument number 18,097, dated December 18, 1991, granted
before Xxxxxx Xxxxx Xxxxxxxx, Esq. alternate notary of Notary Public Xx. 0 xx
Xxxxxxxx Xxx, Xxxxxx, executed by Bancomer and NIZUC.
(ee) "Pending Litigation" means the litigation described in
Sections X.1 through X.11 of the Xxxxxxxxxxx Memo and: (i) the PRODEPA nullity
claim in the original amount of $2,437,204 New Pesos, (ii) the claim of Xxxxxx
Xxxxxx Zerecero, (iii) the claim of Xxxx Xxxxx Xxxxx Xxxxxxx, (iv) the claim of
Xxxxx Xxxxxxx Xxxxxxxx Xxxxxxxx, (v) the claim of Xxxx Xxxx Xxxxxx X., (vi) the
claim of Xxxxxxxx Xxxxxxx Xxxxxxx, and (vii) the claim of Xxxxxxxx Xxxxxxxx
Xxxxx.
(ff) "PRODEPA" means Promotora y Desarrolladora Pacifico, S.
de X.X. de C.V., formerly Promotora y Desarrolladora Xxxxxxxx, X.X. de C.V.
(gg) "PRODEPA Trust" means that trust which is public
instrument number 8,588, dated November 13, 1991, granted before Xxxxxxxxx Xxxx
Xxxxxxx, alternate notary of Notary Public Xx. 0 xx Xxxxxx Xxxxxxxx, Xxxxxxx,
Xxxxxx, executed by Bancomer and PRODEPA.
(hh) "Promotora" means Promotora Cabo Real, S.A. de C.V.,
successor by merger to DTP.
(ii) "Puerto Vallarta Condominium" means the real property
depicted and described in the Puerto Vallarta Survey.
(jj) "Puerto Vallarta Condominium Declaration" means the
Declaration of Condominium formalized under public deed No. 11,924, dated August
8, 1997, granted before Xxxxxx Xxxxxx Xxxxxxx, Esq., Notary Public Xx. 0 xx
Xxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxx, registered in the Public Registry of Property
of Jalisco, Mexico.
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(kk) "Puerto Vallarta Hotel Unit" means the condominium unit
in the Puerto Vallarta Condominium consisting of the hotel currently known as
the Xxxxxx Xxxxxx Puerto Vallarta.
(ll) "Puerto Vallarta Infringing Improvements" means the walls
and any other improvements constructed outside the South Westerly boundary of
the Puerto Vallarta Condominium as more particularly depicted on the Puerto
Vallarta Survey.
(mm) "Puerto Vallarta Survey" means that Levantamiento
Topografico (Planimetria) prepared by the Surveyor, certified on August _____,
1997 which is a survey of the Puerto Vallarta Condominium.
(nn) "Puerto Vallarta Timeshare Unit" means the condominium
unit in the Puerto Vallarta Condominium consisting of the vacation ownership
interval operation.
(oo) "Raintree Cabo" means C.R. Resorts Los Cabos, S. de X.X.
de C.V.
(pp) "Remainder Company" means C.R. Resorts Remainder Company
S. de X.X. de C.V.
(qq) "Xxxxxxxxxxx Memo" means that letter dated June 11, 1997
from Xxxxxxxxxxx y Steta to Raintree Capital Company, LLC regarding due
diligence in connection with the Transactions.
(rr) "Starwood Cancun" means Starwood Cancun, S. de X.X. de
C.V.
(ss) "Starwood Puerto Vallarta" means Starwood Puerto
Vallarta, S. de X.X. de C.V.
(tt) "Surveyor" means Xxxxx y Asociados, S.C.
(uu) "Surveys" means the Cabo Survey, the Cancun Survey and
the Puerto Vallarta Survey.
(vv) "Trust Agreements" means the PRODEPA Trust and the NIZUC
Trust.
(2) Covenants.
(a) Cancun Boundaries. Bancomer hereby represents, covenants
and agrees that, pursuant to the public instrument creating the NIZUC Trust,
Fonatur ostensibly conveyed to Bancomer, as Trustee of the NIZUC Trust, two lots
of real property defined as lots 70 and 71 located in "Boulevard Kukulcan,
Seccion "A", Segunda Fase de la Zona Turistica de Cancun, Xxxxxxxx Roo" (the
"SUBDIVISION") bordered to the South by lot 69 of the Subdivision and to the
North by lot 72 of the Subdivision. Notwithstanding the intended conveyance,
Fonatur has agreed in the Fonatur Acknowledgment that the legal description used
in the conveyance incorrectly described said lots 70 and 71 and that the Fonatur
Acknowledgment sets forth the correct legal description of lots 70 and 71.
Consequently, the
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legal description of the Cancun Condominium (which is comprised of lots 70 and
71) as reflected on the Cancun Survey, does not coincide with the incorrect
legal description. The error is fundamental, and Starwood Cancun and the trustee
of the Cancun Timeshare Trust will not have good and marketable legal title to
the Cancun Hotel Unit and the Cancun Timeshare Unit, respectively, until the
error is corrected by appropriate public instrument and it is verified by
reference to the public instruments registered in the Public Registry of
Property of Xxxxxxxx Roo, Mexico (and any other appropriate official records)
that the current owners of lots 69 and 72 (or their predecessors in title, as
the case may be) did not erroneously obtain title to any portion of lots 70 and
71 (the "POTENTIAL ENCROACHMENTS"). Bancomer, with and for the benefit of
Starwood Cancun and Raintree Cancun, shall, forthwith, obtain and cause to be
registered in the Public Registry of Property of Xxxxxxxx Roo, Mexico (and any
other appropriate official records) any such appropriate corrective
instrument(s). Bancomer agrees that it shall, at all times, vigorously and
continuously pursue its obligations under this subsection (2)(a). In the event
that Bancomer is unable to satisfy its obligation under this subsection (2)(a)
within 360 days of the date of this Agreement, then Starwood Cancun and Raintree
Cancun shall have the right to assume control of the process (with the full and
complete cooperation of Bancomer). In the event that within 360 days from the
expiration of the first 360-day period, Starwood Cancun and Raintree Cancun
(with Bancomer's cooperation) cannot resolve the matter so that the obligations
of Bancomer in this subsection are fully satisfied, then the matter shall be
referred to binding arbitration pursuant to Section (4)(j) to determine the
amount of any Construction Costs and Damages as a result of such failure and
Bancomer shall pay such Construction Costs and Damages as may be awarded in such
arbitration proceedings in accordance with the final determination of the
arbitrator within thirty (30) days of the date of such award.
(b) Cancun Concession. Bancomer provided notice to the
Subsecretaria De Vivienda Y Bienes Inmuebles of the Direccion General Del
Patrimonio Inmobillario Federal (the "AGENCY") of the Transactions. However,
such notice was insufficient in order to allow the Agency to consider and grant
the approval for the Transactions. The Agency has acknowledged receipt of such
notice and its willingness to process Bancomer's request for the transfer of the
Cancun Concession. In addition, Starwood Cancun and Raintree Cancun are not
willing to accept the Cancun Concession unless it ultimately runs for at least
fifteen (15) years from the date of the Transactions. Consequently, Bancomer
hereby represents, covenants and agrees that, with and for the benefit of
Starwood Cancun and Raintree Cancun, that Bancomer shall simultaneously:
(i) apply for and obtain the consent of the Agency (and
all other appropriate governmental authorities) for the Transactions and the
transfer of the Cancun Concession. Any such consent shall not materially modify
the terms of the Cancun Concession or impose upon the transferees any additional
burdens, unless such burdens are purely monetary and Bancomer pays all such
additional amounts, together with any fines, penalties or previously unpaid
amounts required by the Agency; and
(ii) apply for and obtain an extension of the Cancun
Concession for an additional term of no less than fifteen (15) years from the
date of the Transactions (the
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"EXPIRATION DATE"). Any such extension shall not materially modify the terms of
the Cancun Concession or impose upon the transferees any additional burdens,
unless such burdens are purely monetary and Bancomer pays all such additional
amounts.
In the event that Bancomer cannot obtain the approval required by subsection (i)
above within two (2) years from the date of this Agreement, then Bancomer shall
pay to Starwood Cancun the amount of U.S $1,000,000. In the event that Bancomer
secures the transfer of the Cancun Concession but fails to obtain the requisite
extension thereof as provided in subsection (ii) above, then Bancomer shall pay
to Starwood Cancun the amount of U.S. $250,000. Except as described in
subsection (i) above, Bancomer shall not be liable for any amounts due under the
Cancun Concession, any extension of the Cancun Concession, or any new concession
or license granted in the future.
(c) Cabo Accreted Area. Bancomer hereby represents, covenants
and agrees that, with and for the benefit of Raintree Cabo, upon the request of
Raintree Cabo, Bancomer shall apply for and obtain a concession and/or license
(for the maximum legally permissible term) to maintain the Cabo Unlicensed
Improvements, which it acknowledges were constructed without the requisite
governmental license, outside the boundary of the Cabo Timeshare Unit. If either
(i) the competent governmental authority demands the removal of all or any part
of the Cabo Unlicensed Improvements, (ii) imposes any fines, penalties or fees
on Raintree Cabo or increases the costs of the concession and/or license
resulting from the existence of the Cabo Unlicensed Improvements, or (iii) if
Bancomer does not obtain for Raintree Cabo the requisite license, as requested
by Raintree Cabo, Bancomer shall pay any Damages suffered by Raintree Cabo,
including without limitation, any Construction Costs associated with the removal
of the Cabo Unlicensed Improvements and reconstructing any improvements outside
the Cabo Accreted Area occasioned by such removal.
(d) Cabo Ecological Preserve. When Bancomer acquired title to
the Los Cabos Property from Promotora, it covenanted in the Cabo Trust (which
has been subsequently confirmed by other agreements), among other things, that
it would not invade or construct any improvements upon the portion of the Los
Cabos Condominium which is referred to as the "Cerro Colorado", such portion
constituting a federal ecological preserve (the "FEDERAL PRESERVE"). The limit
of the Federal Preserve is referred to in the relevant documents as the "xxxx
50". The Cabo Survey reflects that the xxxx 50 line as it existed at the time of
the conveyance to Bancomer has been moved by construction and that a portion of
the hotel improvements adjoining the Cerro Colorado were constructed within what
were the boundaries of the Federal Preserve at the time Bancomer acquired title
to the real property. Bancomer shall indemnify Starwood Cabo for any Damages
suffered by Starwood Cabo, including without limitation, any Construction Costs
associated with the removal of any hotel improvements within the Federal
Preserve and reconstructing any improvements outside the Federal Preserve
occasioned by such removal.
(e) Puerto Vallarta Seawall. Bancomer hereby represents,
covenants and agrees that, with and for the benefit of Starwood Puerto Vallarta
and Raintree Puerto
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Vallarta, upon the request of Starwood Puerto Vallarta and Raintree Puerto
Vallarta, Bancomer shall apply for and obtain a concession and/or license (for
the maximum legally permissible term) to maintain the Puerto Vallarta Infringing
Improvements, which it acknowledges were constructed without the requisite
governmental license, outside the boundary of the Puerto Vallarta Condominium.
If either, (i) the competent governmental authority demands the removal of all
or any part of the Puerto Vallarta Infringing Improvements, (ii) imposes any
fines, penalties or fees on Starwood Puerto Vallarta or Raintree Puerto Vallarta
or increases the costs of the concession and/or license resulting from the
existence of the Puerto Vallarta Infringing Improvements, or (iii) if Bancomer
does not obtain for Starwood Puerto Vallarta and Raintree Puerto Vallarta the
requisite concession and/or license, as requested by Starwood Puerto Vallarta
and Raintree Puerto Vallarta, Bancomer shall pay any Damages incurred by
Starwood Puerto Vallarta or Raintree Puerto Vallarta, including, without
limitation, any Construction Costs associated with the removal of the Puerto
Vallarta Infringing Improvements.
(f) House Sub. Bancomer hereby represents, covenants and
agrees that, with and for the benefit of House Sub, Bancomer shall cause to be
legally consummated, the transfer (or acquisition) of title to House Sub of
those residential units identified n Sections III.1 (i), (iii), (iv), (v), (vi)
and (vii) of the Xxxxxxxxxxx Memo as promptly as possible, so that good and
marketable title thereto shall be vested in House Sub, free and clear of any
liens, encumbrances or other charges, and shall pay (or cause to paid) all fees,
taxes, costs and expenses incidental to such processes. In the event that
Bancomer does not satisfy the obligation in this subsection within two (2) years
from the date of this Agreement, then the matter shall be referred to binding
arbitration pursuant to Section (4)(j) to determine the amount of any Damages as
a result of such failure and Bancomer shall pay such Damages as may be awarded
in such arbitration proceedings in accordance with the final determination of
the arbitrator within thirty (30) days of the date of such award.
(g) Cozumel Land. Bancomer hereby represents, covenants and
agrees that, with and for the benefit of DTI Cozumel, Bancomer shall cause to be
legally consummated, the transfer (or acquisition) of title to DTI Cozumel of
the Cozumel Land as promptly as possible, so that good and marketable title
thereto shall be vested in DTI Cozumel free and clear of any liens, encumbrances
or other charges, and shall pay (or cause to paid) all fees, taxes, costs and
expenses incidental to such process. In the event that Bancomer does not satisfy
the obligation in this subsection within two (2) years from the date of this
Agreement then, Bancomer shall pay to Desarollos Turisticos Xxxxxx, S. de X.X.
de C.V. the amount of U.S. $11,740,000.
(h) Pending Litigation. Bancomer hereby represents, covenants
and agrees that, with and for the benefit of the specific defendants (whether
named as a defendant or the successor to such defendant by merger, spin-off of
assets or otherwise) named in the Pending Litigation, Bancomer shall pay for the
cost of defending such Pending Litigation and pay any Damages arising or growing
out of the Pending Litigation.
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(i) Maritime Zone. Bancomer hereby represents, covenants and
agrees that, with and for the benefit of each of the owners of the condominium
units within the Condominiums, to the extent that any improvements which have
been constructed, installed or erected in connection with any of the
Condominiums are known to be, or subsequently discovered to have been, located
in the Maritime Zone adjoining such condominium as of the date of this
Agreement, that upon request of any of said owners whose property is affected by
such encroaching improvement, Bancomer shall apply for and obtain a concession
and/or license (for the maximum legally permissible term) to maintain such
encroaching improvements. If within two (2) years from the date of this
Agreement either, (i) the competent governmental authority demands the removal
of all or any part of such encroaching improvements, (ii) imposes any fines,
penalties or fees on any of the owners of the condominium units within the
Condominiums, or increases the cost of the concession and/or license, resulting
from the existence of such encroaching improvements, or (iii) if Bancomer does
not obtain for the affected owners of the condominium units within the
Condominiums the requisite concession and/or license, as requested by such
owner(s), Bancomer shall pay any resulting Damages, including, without
limitation, any Construction Costs associated with the removal of any such
encroaching improvements, replacement of the removed improvements (to the extent
practical) and the reconstruction of any other affected improvements.
(j) Xxxxxxxx Claim. Bancomer hereby represents, covenants and
agrees that, with and for the benefit of Starwood Cabo and Raintree Cabo, that
Bancomer shall obtain and cause to registered in the Public Registry of Baja
California Sur, Mexico (and any other appropriate public registry) an
appropriate public instrument (acceptable to Xxxxx or such other counsel
reasonably acceptable to Starwood Cabo and Raintree Cabo), specifically between
Xxxx Xxxxxx Xxxxxxxx Xxxxxxx ("XXXXXXXX") and Starwood Cabo, which finally and
fully determines and establishes that Xxxxxxxx does not have any claim against
the Cabo Condominium, and in any event Bancomer shall indemnify and hold
harmless Starwood Cabo and Raintree Cabo from any Damages arising or growing out
of Xxxxxxxx' claim to ownership of any portion of the Cabo Condominium.
(k) BTS/VDC. Bancomer hereby represents, covenants and agrees
that it shall, as promptly as practicable, but in any event within thirty (30)
days from the date of this Agreement, transfer for U.S.$1.00 to such Benefited
Parties as CRR shall advise in writing, all rights and interests, if any,
representing the right to use, vacation intervals or any similar rights with
respect to any timeshare suites in the Cancun Timeshare Unit and the Puerto
Vallarta Timeshare Unit.
(3) Indemnification.
(a) Bancomer hereby covenants and agrees, with and for the
benefit of each of the Benefited Parties, to protect, indemnify, reimburse,
defend and hold harmless the Benefited Parties, at Bancomer's sole cost and
expense, from and against any and all Damages of any kind or nature, which may
at any time be imposed upon, incurred by or asserted or awarded against any of
the Benefited Parties, arising from or growing out of,
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directly or indirectly the failure by Bancomer to comply with its several
obligations to the Benefited Parties under this Agreement.
(b) For purposes of this Section 3, a party making a claim for
indemnity under this Section 3 is hereinafter referred to as an "INDEMNIFIED
PARTY". All claims by any Indemnified Party under this Section 3 hereof shall be
asserted and resolved in accordance with the provisions of subsections 3(c), (d)
and (e).
(c) The Damages and other items referred to in subsection 3
(a) above, for which the Benefited Parties are indemnified under this Section 3,
shall be reimbursed to such Benefited Party without any requirement of waiting
for the ultimate outcome of any litigation, claim or other proceeding, within
thirty (30) days after notice from such Benefited Party, itemizing the amounts
incurred to the date of such notice; provided, however, that in the event that
there is a dispute between such Benefited Party and Bancomer with respect to a
specific amount, such dispute shall be resolved in accordance with the
arbitration provisions in Section (4)(j) and the reimbursement by Bancomer of
the specifically disputed amount shall be contingent on the outcome of the
arbitration of such dispute.
(d) If any claim or demand for which Bancomer may be liable to
an Indemnified Party is asserted against or sought to be collected from such
Indemnified Party by a third party (in each case, a "CLAIM"), said Indemnified
Party shall promptly notify Bancomer in writing of such Claim stating with
reasonable specificity the circumstances of the Indemnified Party's claim for
indemnification; provided, however, that any failure to give such notice will
not affect the rights to indemnity of the Indemnified Party except to the extent
that the rights of Bancomer are actually prejudiced by the absence or delay of
the notice. Immediately upon becoming aware of a Claim for which indemnity is or
could be sought, Bancomer shall use its best efforts to vigorously and
continuously defend against the Claim and any proceedings resulting or derived
therefrom (with qualified legal counsel reasonably acceptable to the Indemnified
Party and licensed to practice in the jurisdiction in which the Claim is
asserted), and shall take all actions necessary or appropriate, including but
not limited to the posting of such bond or other security as may be required by
any judicial or governmental authority, so as to enable the Claim to be defended
without interfering with the conduct of the business of any Indemnified Party.
At all times, Bancomer shall keep the Indemnified Party fully informed of the
status of the Claim or any proceedings in connection therewith and shall consult
with the Indemnified Party with respect to the defense against the Claim. The
Indemnified Party shall have the right (at its own expense) to participate
jointly with Bancomer in the defense of any Claim in connection with the
Indemnified Party's claim for indemnity under this Section 3, provided that
Bancomer shall retain the right to direct the defense against the Claim. The
Indemnified Party shall not unreasonably withhold its consent to the settlement
or resolution of a Claim, provided that the Indemnified Party is not required
thereby to incur any present or future cost, expense or monetary loss.
(e) Bancomer may not assume the defense if the named parties
to any Claim (including any impleaded parties) include both the Indemnified
Party and Bancomer, and representation of both parties by the same counsel would
be inappropriate due to actual
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or potential differing interests between them. In any such case, the Indemnified
Party shall have the right to employ counsel (duly qualified as provided in
subsection 3(d)) of its choice, at the expense of Bancomer. Upon request of
Bancomer, the Indemnified Party shall, to the extent it may legally do so and to
the extent that it is compensated in advance by Bancomer for any costs and
expenses thereby incurred,
(i) take such action as Bancomer may reasonably request
in connection with such action,
(ii) allow Bancomer to dispute such action in the name of
the Indemnified party and to conduct a defense to such action on behalf of the
Indemnified Party, and
(iii) render to Bancomer all such assistance as Bancomer
may reasonably request in connection with such dispute and defense.
(4) Miscellaneous Provisions.
(a) No delay on the part of any of the Benefited Parties in
exercising any of their rights, remedies, powers or privileges under this
Agreement, or as otherwise provided at law or in equity, shall operate as a
waiver of any such right, remedy, power or privilege, or excuse Bancomer from
its obligations hereunder. Any waiver of such right, remedy, power or privilege
by any Benefited Party must be in writing and signed by an authorized agent of
such Benefited Party.
(b) All notices hereunder shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes when sent by
registered or certified mail, if to:
Bancomer: Bancomer, S.A.
Xx. Xxxxxxxxxxx Xx. 0000
Col. Xoco
X.X. 00000, X,Xxxxxx, D.F.
Attn: Xxxxxx Xxxxxxxxx Xxxxxxxx, Chief
Financial Officer
Xxxxxx Xxxxxx y Xxxxxx, General
Counsel
Xxxxxxxxx Xxxxxxxxx Mirelles, Dir. of
Mergers and Acquisitions
Starwood Cancun or
Starwood Puerto Vallarta: c/o Starwood Lodging Corporation
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxx
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with a copy to: Greenberg, Traurig, Hoffman, Lipoff, Xxxxx
& Quentel
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Raintree Cancun or
Raintree Puerto Vallarta: Pennzoil Place-South Tower
Suite 2310, 000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxx
with a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Pennzoil Place-South Tower
Suite 1900, 000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Other Benefited Parties: See Exhibit "A" attached hereto.
Bancomer and any Benefited Party may designate a change of address by written
notice (in accordance with the provisions of this Section) to Bancomer or the
Benefited Party making such designation, as the case may be, received by
Bancomer or said Benefited Party at least ten (10) days before such change of
address is to become effective.
(c) In the event that any of the Benefited Parties assumes
control of the process of satisfying any of Bancomer's obligations or
undertakings described in Section (2), Bancomer shall reimburse such Benefited
Party for any Damages as they are incurred by such Benefited Party without any
requirement of waiting for the ultimate outcome of any litigation, claim or
other proceeding, within thirty (30) days after notice from such Benefited
Party, itemizing the amounts incurred to the date of such notice; provided,
however, that in the event that there is a dispute between such Benefited Party
and Bancomer with respect to a specific amount, such dispute shall be resolved
in accordance with the arbitration provisions in Section 4(j) and the
reimbursement by Bancomer of the specifically disputed amount shall be
contingent on the outcome of the arbitration of such dispute.
(d) To the extent that Xxxxx has been involved in identifying
and resolving any problems or issues, it shall be retained by Bancomer to serve
as legal counsel to assist Bancomer in the resolution of any such matter or such
other counsel as may be reasonably acceptable to any affected Benefited Party.
Bancomer hereby acknowledges and agrees that (i) Xxxxx currently serves as
counsel to certain of the Benefited Parties, (ii) it waives any present or
future conflicts created thereby, and (iii) Xxxxx can continue to serve as
counsel for said Benefited Parties. Any other counsel retained by Bancomer to
assist it in complying with its obligations hereunder shall be reasonably
acceptable to the Benefited Party which is the beneficiary of such obligation.
All surveying, land measurement work and related engineering work shall be
performed or supervised by Surveyor.
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(e) All undertakings and obligations of Bancomer pursuant to
this Agreement shall be at the sole cost and expense (including, without
limitation, cost of Xxxxx and Surveyor) of Bancomer.
(f) To the extent that Bancomer fails to complete any
obligation or undertaking, within the specific time period described in the
specific provision containing such obligation or undertaking, then unless the
respective Benefited Party (or Benefited Parties) elects, in its sole and
exclusive judgment, to extend such time period, the respective Benefited Party
(or Benefited Parties) shall have the right to assume control of the process of
curing the specific defect or problem, at Bancomer's sole cost and expense,
using such third party advisors, consultants or professionals as it (or they)
may choose (after consulting with Bancomer) and may do so in whatever manner it
deems (or they deem) necessary and appropriate to accomplish the cure at the
earliest possible time, including the payment of any sums that may be required
by third parties in order to grant any rights necessary to cure the defect or
waive any claims causing or contributing to the defect.
(g) Any covenants and indemnities that run in favor Raintree
Cabo, Raintree Cancun or Raintree Puerto Vallarta shall also run to the benefit
of the trustees for the respective trusts for which Raintree Cabo, Raintree
Cancun and Raintree Puerto Vallarta are beneficiaries and the entities which
hold the remainder of the rights under said trusts, as may be legally
appropriate.
(h) This Agreement shall not be deemed a waiver or limitation
of any indemnity obligations under the Purchase Agreement. Each of the
covenants, undertakings and indemnities contained herein are cumulative with any
other obligation of Bancomer in any other agreement or document. In the event of
any inconsistency between the terms and provisions of this Agreement and the
Purchase Agreement, the terms and provisions of this Agreement shall govern.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original. Said counterparts shall
constitute but one and the same instrument and shall be binding upon each of the
undersigned individually as fully and completely as if all had signed but one
instrument so that the liability of each of the undersigned shall be unaffected
by the failure of any of the undersigned to execute any or all of said
counterparts.
(j) This Agreement and the rights and obligations of the
parties hereunder shall in all respects be construed, interpreted, enforced and
governed by and in accordance with the laws of the State of New York (excluding
the principles thereof governing conflicts of law). In the event that Bancomer
or any Benefited Party are unable to resolve any dispute, controversy or claim
arising out of or in connection with this Agreement (a "Controversy"), either
party to such dispute may request in writing that the Controversy be referred to
the respective senior level management of each party for decision. Such managers
shall meet immediately and attempt in good faith to negotiate a resolution of
the Controversy. If the managers are unable to resolve the matter within thirty
(30) days of the written request
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referring the matter to them, any party may, within thirty (30) days following
the end of such thirty (30) day period, elect to refer the matter to arbitration
and the Controversy shall be resolved by binding arbitration in accordance with
the Arbitration Rules of the International Chamber of Commerce (the "ICC") then
in effect (the "RULES").
(i) There shall be a sole arbitrator selected in
accordance with the Rules. If the parties are unable to agree upon the
arbitrator within thirty (30) days of the referral to arbitration, the
International Court of Arbitration of the ICC shall make such appointment in
accordance with the Rules. The arbitration shall be conducted, and the award
shall be rendered, in the English language. The arbitration shall be held in New
York, New York.
(ii) Each party shall cooperate with the other party in
making full disclosure of and providing access to all information and documents
requested by the other party in connection with such proceedings. The arbitrator
shall have the power to order such disclosure. Should a party fail to comply
with such order, the arbitrator shall take such refusal into account in
determining any award.
(iii) The decision of the arbitrator shall be final and
binding on the parties and shall be the sole and exclusive remedy regarding any
claims, counterclaims, issues or accounting presented to the arbitrator.
Judgment upon the award may be entered by any court having jurisdiction thereof.
The parties agree to waive any rights of recourse or appeal to any court in
connection with any questions of law arising in the course of the arbitration or
with respect to any award made except for actions to enforce an award.
(iv) Any monetary award shall be made and payable in
United States Dollars. The arbitrator shall be authorized to grant pre-award and
post-award interest at commercial rates without there being any presumption as
to whether such interest will be granted. Unless otherwise ordered by the
arbitrator, each party shall bear its own costs and fees, including attorneys'
fees. The parties expressly agree that the arbitrator shall have no power to
consider or award punitive or exemplary Damages.
(v) This agreement to arbitrate shall be binding upon
the successors, assigns, trustee, receiver or executor of each party.
(k) Except as expressly provided herein to the contrary, this
Agreement shall be binding upon and inure to the benefit of the Benefited
Parties and Bancomer and their respective heirs, personal representatives,
successors and assigns. Notwithstanding the foregoing, Bancomer shall not
delegate or assign any of its obligations hereunder without the prior written
consent of any Benefited Parties who would be affected by such delegation.
(l) Any reference in this Agreement to attorneys' fees paid or
incurred by Bancomer or any Benefited Party shall include reasonable and
documented attorneys', paralegals', consultants' or experts' fees and
disbursements and costs of litigation, appeals and any other legal or
administrative proceeding (including, without limitation, such fees or expenses
incurred in any and all judicial, bankruptcy, reorganization, administrative, or
other
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proceedings, including appellate proceedings, whether such fees or expenses
arise before proceedings are commenced or after entry of a final order or
judgment).
(m) In the event that any Benefited Party is required to bring
any action to enforce the payment or performance of the obligations of Bancomer,
the prevailing party shall be entitled to recover its attorneys' fees.
(n) Use of any gender shall include all other genders and
words in the singular include the plural, and the plural include the singular.
(o) If any provision of this Agreement shall be contrary to
the laws of the jurisdiction in which the same shall be sought to be enforced,
the illegality or unenforceability of any such provision shall not affect the
other terms, covenants and conditions hereof, and the same shall be binding upon
Bancomer hereto with the same force and effect as though such illegal or
unenforceable provision were not contained herein. Upon such determination that
any provision herein is unenforceable, such provision shall automatically be
modified (without any action necessary by Bancomer or any Benefited Party) to
the extent necessary to resolve the illegality and to make such provision(s)
enforceable under applicable law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
Signed, sealed and delivered BANCOMER, S.A., INSTITUCION DE
in the presence of: BANCA MULTIPLE, GRUPO FINANCIERO
By:
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Name:
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Title:
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