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EXHIBIT 10.16
PRIVILEGED AND CONFIDENTIAL
AGREEMENT
by and among
RAINTREE CAPITAL COMPANY LLC.
CLUB XXXXXX RESORTS, INC.,
and
SLT REALTY LIMITED PARTNERSHIP
Dated as of May 20, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND CONSTRUCTION................................................................... 2
Section 1.1 Captions......................................................... 2
Section 1.2 Number and Gender................................................ 2
Section 1.3 Terms............................................................ 2
Section 1.4 Other Definitional Provisions.................................... 2
Section 1.5 Definitions...................................................... 2
ARTICLE II
PURCHASE OF STOCK AND LLC INTERESTS............................................................ 6
Section 2.1 Purchase and Sale of the Purchased LLC Interests................. 6
Section 2.2 Adjustment....................................................... 7
Section 2.3 Closing, Delivery and Payment.................................... 7
Section 2.4 Agreements Concerning Ancillary Matters.......................... 7
Section 2.5 Possible Pink Tower Conversion................................... 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RAINTREE AND THE COMPANY..................................... 10
Section 3.1 Organization and Good Standing................................... 10
Section 3.2 Authorization and Validity....................................... 10
Section 3.3 Organization and Good Standing of the Relevant
Company Subsidiaries............................................. 11
Section 3.4 Capitalization of the Company.................................... 11
Section 3.5 Capitalization of the Relevant Company Subsidiaries.............. 11
Section 3.6 Consents and Approvals........................................... 11
Section 3.7 Non-Contravention................................................ 11
Section 3.8 Absence of Undisclosed Liabilities of the
Company and the Relevant Company Subsidiaries.................... 12
Section 3.9 Litigation and Claims............................................ 12
Section 3.10 Compliance with Laws............................................. 12
Section 3.11 Contracts........................................................ 12
Section 3.12 Finder's Fees and Advisors' Fees................................. 12
Section 3.13 Bancomer Agreement............................................... 13
Section 3.14 Confirmation..................................................... 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER........................................................ 13
Section 4.1 Organization and Good Standing of Buyer.......................... 13
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Section 4.2 Buyer's Authorization and Validity............................... 13
Section 4.3 Consents and Approvals........................................... 13
Section 4.4 Non-Contravention of Buyer....................................... 13
Section 4.5 Finder's Fees.................................................... 14
ARTICLE V
COVENANTS...................................................................................... 14
Section 5.1 Access........................................................... 14
Section 5.2 Taking of Necessary Action....................................... 15
Section 5.3 Transactional Services........................................... 15
Section 5.4 Notice of Certain Changes........................................ 16
Section 5.5 Press Releases................................................... 16
Section 5.6 Bancomer Agreement............................................... 16
Section 5.7 Hotel Subsidiary and Hotel Holding Company
Organizational Documents......................................... 17
Section 5.8 Co-Buyer......................................................... 17
Section 5.9 Requisite Regulatory Approvals................................... 17
Section 5.10 Restructuring.................................................... 17
Section 5.11 Working Capital Adjustment....................................... 17
ARTICLE VI
CONDITIONS TO CLOSING.......................................................................... 18
Section 6.1 Conditions to the Obligations of Buyer
and the Company.................................................. 18
Section 6.2 Conditions to the Obligations of Buyer........................... 18
Section 6.3 Conditions to the Obligations of the Company..................... 19
ARTICLE VII
SURVIVAL; INDEMNIFICATION...................................................................... 19
Section 7.1 Survival......................................................... 19
Section 7.2 Indemnification by Raintree and the Company...................... 19
Section 7.3 Indemnification by Buyer......................................... 20
Section 7.4 Notice, Participation and Duration............................... 20
ARTICLE VIII
TERMINATION.................................................................................... 20
Section 8.1 Termination...................................................... 20
Section 8.2 Buyer Termination Option......................................... 21
Section 8.3 Effect of Termination............................................ 21
ARTICLE IX
REMEDIES....................................................................................... 22
Section 9.1 Equitable Remedy................................................. 22
Section 9.2 Damages.......................................................... 22
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ARTICLE X
MISCELLANEOUS.................................................................................. 22
Section 10.1 Due Diligence.................................................... 22
Section 10.2 Notices.......................................................... 23
Section 10.3 Amendment; Waiver................................................ 23
Section 10.4 Assignment....................................................... 23
Section 10.5 Binding Effect................................................... 24
Section 10.6 Entire Agreement................................................. 24
Section 10.7 Parties in Interest.............................................. 24
Section 10.8 Public Disclosure................................................ 24
Section 10.9 Counterparts..................................................... 24
Section 10.10 Submission to Jurisdiction; Selection of Forum................... 24
Section 10.11 Headings......................................................... 25
Section 10.12 Severability..................................................... 25
Section 10.13 Third Parties.................................................... 25
Section 10.14 Incorporation of Exhibits, Schedules and Annexes................. 25
Section 10.15 Waivers.......................................................... 25
ARTICLE XI
POST CLOSING MATTERS........................................................................... 26
Exhibit A Form of Bancomer Agreement
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AGREEMENT, (this "Agreement") dated as of May 12, 1997, among RAINTREE
CAPITAL COMPANY, LLC, a Texas limited company ("Raintree"), CLUB XXXXXX RESORTS,
INC., a Nevada corporation (the "Company"), and SLT REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership ("Buyer").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Stock Purchase
Agreement (the "Bancomer Agreement"), to be dated on or about the date hereof,
among Bancomer S.A, Institucion de Banca Multiple, Grupo Financiero, a Mexican
corporation ("Bancomer"), Desarollos Turisticos Bancomer, S.A. de C.V., a
Mexican corporation ("DTB"), the Company and CR Hotel Acquisition Company, LLC,
a Delaware limited liability company ("CR Hotel"), the Company will agree to
purchase all of the issued and outstanding Capital Stock of DTB;
WHEREAS, DTB owns all of the issued and outstanding common stock of each
of Desarollos Turisticos Integrales Cabo San Xxxxx, X.X. de C.V., Promotora
Turistica Nizuc, S.A. de C.V. and Promotora y Desarrolladora Xxxxxxxx, X.X. de
C.V., each, a Mexican corporation.
WHEREAS, the parties hereto intend that the (i) Timeshare Business and
the Other Business (collectively the "Timeshare/Other Business"); and (ii) the
Hotel Business are intended to be owned by separate entities;
WHEREAS, Buyer desires to acquire in accordance with the terms hereof a
limited liability company interest in CR Hotel as provided herein (the
"Purchased LLC Interests") for an aggregate purchase price of $132,750,000,
payable by Buyer paying $57,750,000 in cash and taking subject to the Hotel Note
(unless Buyer provides financing in lieu of such Hotel Note in accordance with
the terms hereof);
WHEREAS, as of the date hereof, Starwood Capital Group, L.L.C., a
Connecticut limited liability company ("Capital") has entered into an agreement
with Raintree and the Company to make a loan to an affiliate of the Company and
with respect to the purchase of stock in the Company in accordance with the
terms thereof.;
WHEREAS, the parties believe that the business of Buyer will facilitate
the Company's acquisition of the Capital Stock of DTB and the creation of
long-term value for the Company in the ownership and growth of the
Timeshare/Other Business and the Hotel Business;
NOW THEREFORE, in consideration of the above and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged by the parties
hereto, Raintree, the Company and Buyer hereby agree as follows:
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ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1 Captions. Titles and captions of articles and sections set
forth in this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend or describe the scope of this
Agreement or the meaning, of any provision set forth herein.
Section 1.2 Number and Gender. Whenever required by the context, the
singular number shall include the plural and vice versa and the gender of any
pronoun shall include the other gender.
Section 1.3 Terms. Terms may be defined in the text of this Agreement
and, unless otherwise indicated, shall have such meaning throughout this
Agreement.
Section 1.4 Other Definitional Provisions
(a) The words "hereof," "herein", and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(b) The terms "dollars" and "$" means United States dollars.
Section 1.5 Definitions
"Ancillary Agreements" is defined in the Bancomer Agreement.
"Aggregate Annual Fees" is defined in Section 2.4(c).
"Bancomer" is defined in the Recitals.
"Bancomer Agreement" is defined in the Recitals.
"Bancomer Escrow Agreement" means the "Escrow Agreement" as
defined in the Bancomer Agreement.
"Bancomer Transactions" means the transactions contemplated by
the Bancomer Agreement.
"Business Days" is defined in the Bancomer Agreement.
"Buyer" is defined in the Recitals.
"Buyer Indemnitees" is defined in Section 0.
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"Buyer Rate" means the rate of either return or interest, as the
case may be, that is the lower of 12% per annum and Buyer's actual aggregate
cost of debt capital on an annualized basis with respect to the $75,000,000 debt
replacing or refinancing the Hotel Note as provided herein, provided however,
Buyer Rate shall be not less than 12% until July 1, 2000.
"Capital Stock" means with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
voting, or non-voting) of such Persons capital stock or equity interests whether
now outstanding or issued after the date hereof, including but not limited to
all common stock and preferred stock.
"Claim" is defined in Section 0.
"Closing" is defined in Section 0.
"Closing Date" is defined in Section 0.
"Commitments" is defined in the Bancomer Agreement.
"Company" is defined in the Recitals.
"Company Common Stock" means all of the Capital Stock of the
Company.
"Company Indemnities" is defined in Section 0.
"Corporate Banking" is defined in the Bancomer Agreement.
"CR Hotel" is defined in the Recitals.
"Damages" is defined in the Bancomer Agreement.
"Default" by either party ("Defaulting Party") shall include the
failure to consummate the Closing on or before the Termination Date if the
failure to consummate the Closing on or before such date resulted from the
willful and knowing failure by the Defaulting Party to fulfill any undertaking
or commitment provided for herein that is required to be fulfilled by such
Defaulting Party at or prior to Closing.
"DTB" is defined in the Recitals.
"Enforceable" means an agreement or contract is "Enforceable", if
it constitutes the legal, valid and binding obligation of the applicable Person
enforceable against such Person in accordance with its terms, subject to
bankruptcy, reorganization, insolvency and similar Laws of general application
relating to or affecting the rights of creditors, and subject to general
principles of equity.
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"Escrow Agent" means Greenberg, Traurig, Hoffman, Lipoff, Xxxxx &
Xxxxxxx in its capacity as escrow agent under the Escrow Agreement.
"Escrow Agreement" means an Escrow Agreement by and among, Buyer,
the Company and Escrow Agent, pursuant to which on or prior to the date hereof
Buyer will deposit $1,500,000 into escrow in the form reasonably approved by the
Company, Buyer and Escrow Agent consistent with the provisions hereof and
providing such rights as are customary for the protection of Escrow Agent.
"Escrow Deposit" means the $1.5 million deposit to be held by
Escrow Agent in accordance with the provisions of the Escrow Agreement.
"Governmental Body" is defined in the Bancomer Agreement.
"Hotel Business" means (i) the "Hotel Business" as defined in the
Bancomer Agreement and (ii) one-half of the Capital Stock of Corporacion
Habitacional Mexicana, S.A.
de C.V.
"Hotel Management Agreement" is defined in Section 0(c).
"Hotel Note" had the meaning assigned to "US $75 million Hotel
Senior Mortgage Note" in the Bancomer Agreement.
"Hotel Subsidiaries" means the wholly-owned subsidiaries of DTB
owning the Hotel Business.
"Indemnitee" is defined in Section 0.
"Indemnitor" is defined in Section 0.
"Laws", mean, all laws (common or statutory), statutes,
ordinances, rules, regulations and decrees applicable to the referenced matter.
"Liabilities" is defined in the Bancomer Agreement.
"Lien" is defined in the Bancomer Agreement.
"LLC Interests" means the limited liability company interests of
CR Hotel to be held initially by Buyer (or its designated affiliate or
affiliates) and the Company pursuant to a limited liability company operating
agreement approved by Buyer and the Company in accordance with the terms hereof.
Buyer shall receive a 16.5% priority annual cumulative return with respect to
$43,100,000 ($42,750,000 of cash contributed and $350,000 of expenses paid
pursuant to Section 5.3). In addition Buyer shall be entitled to an annual
cumulative priority
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return equal to (a) the Buyer Rate with respect to imputed debt equal to
$15,000,000, and (b) amortization of such imputed debt at the amortization rate
under the Hotel Note or the replacement thereof, as the case may be. The
priority returns will be calculated and paid on a quarterly basis and all
remaining Net Cash Flow, net of current and accumulated priority returns, on a
quarterly basis shall be distributed 80% to Buyer and 20% to the Company.
"Manager" means Westin Hotels or the affiliate thereof managing
the operation of the Hotel Business.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on or with respect to the business, assets, financial
condition or results of operations of such Person and its Subsidiaries taken as
a whole.
"Net Cash Flow" means the difference between (i) the gross
operating revenue of the Hotel Business and (ii) the sum of all operating
expenses of the Hotel Business including, but not limited to, (a) capital
expenditure reserves, (b) operating reserves, (c) seasonality adjustments, (d)
management fees, (e) insurance, (f) all federal and local taxes (including asset
taxes and income taxes), (g) the greater of (1) a 5% furniture, fixture and
equipment reserve and (2) the amount, if any, by which expenditures for
furniture, fixtures and equipment actually made in any year exceed the total
amount of reserves therefor, and (h) debt service on the Hotel Note or any
replacements, refinancings, modifications, extensions or increases thereof or
additional indebtedness of CR Hotel.
"NOI" means the difference between gross operating revenue of the
Hotel Business and the sum of all operating expenses of the Hotel Business
(including, without limitation, management fees, insurance, all federal and
local taxes (including asset taxes) but excluding income taxes and the greater
of (x) a 5% reserve for furniture, fixtures and equipment and (y) the amount, if
any, by which expenditures for furniture, fixtures and equipment actually made
in any year exceed the total amount of reserves therefor).
"Person" is defined in the Bancomer Agreement.
"Proceedings" is defined in the Bancomer Agreement.
"Purchased Common Stock" is defined in the Recitals.
"Purchased LLC Interests" is defined in the Recitals.
"Raintree" is defined in the Recitals.
"Relevant Company Subsidiaries" means the Timeshare Holding
Company and the Timeshare Subsidiaries.
"Requisite Regulatory Approvals" means all permits, approvals,
filings, consent
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and waivers required to be obtained or made, and all waiting periods required to
expire, before the consummation of the Transactions, as applicable, under all
Laws of any jurisdiction, domestic or foreign, having jurisdiction over the
Transactions.
"Starwood" means collectively Buyer and Capital.
"Subsidiary" is defined in the Bancomer Agreement.
"Termination Date" is defined in Section 1.1 of the Bancomer
Agreement.
"Timeshare Assets" is defined in Section 1.1 of the Bancomer
Agreement.
"Timeshare Business" is defined in the Bancomer Agreement.
"Timeshare Holding Company" means the Mexican corporation to be
organized to hold the Capital Stock of DTB.
"Timeshare/Other Business" means all of the assets, business and
operations of DTB other than the Hotel Business.
"Timeshare Subsidiaries" means the indirect subsidiaries of the
Company to be formed in accordance with Article XV of the Bancomer Agreement in
connection with the Timeshare Business.
"Transactions" means the transactions contemplated by this
Agreement.
"Transfer Taxes" is defined in the Bancomer Agreement.
ARTICLE II
PURCHASE OF STOCK AND LLC INTERESTS
Section 2.1 Purchase and Sale of the Purchased LLC Interests. On the
terms and subject to the conditions set forth herein, at the Closing, the (i)
Buyer shall pay by wire transfer of immediately available funds to Bancomer the
sum of $56,250,000, (ii) $1.5 million shall be paid by wire transfer of
immediately available funds to Bancomer from the escrow as provided in Section
0, and (iii) Buyer, at its option, shall either (a) take subject to the Hotel
Note, or (b) provide financing in the amount of $75,000,000 at the Buyer Rate to
be secured by the Hotel Business in lieu of the Hotel Note. Buyer acknowledges
that the interest in CR Hotel in the Hotel Business will be subject to either
the Hotel Note or the financing provided by Buyer as provided in the preceding
sentence. In the event that Buyer does not elect to provide the $75,000,000
financing described above, then, in such event, Buyer shall have a continuing
right to refinance the Hotel Note at the Buyer Rate upon notice to CR and
Corporate Banking. Buyer and the Company agree that the Hotel Note will provide
for a right of prepayment without penalty or premium.
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Section 2.2 Adjustment. At Closing, Buyer's Escrow Deposit under the
Escrow Agreement shall be applied toward the purchase price of the Purchased LLC
Interests.
Section 2.3 Closing, Delivery and Payment
(a) The Transactions shall be consummated (the "Closing") at the
offices of Bancomer S A., Institucion de Banca Multiple, Grupo Financiero, Av.
Universidad 1200, Col. Xoco, 00000 Xxxxxx, D.F., concurrently with the closing
of the Bancomer Transactions, or at such other place and time as the parties may
mutually agree. The date on which such Closing occurs is referred to as the
"Closing Date". The parties shall conduct a pre-closing at the offices of Akin,
Gump, Strauss, Xxxxx & Xxxx, L.L.P., 1900 Pennzoil Place - South Tower, 711
Louisiana, Xxxxxxx, Xxxxx 00000 on the date that is five (5) Business Days prior
to the Closing Date, or at such other time and place as the parties may mutually
agree.
(b) At the Closing, the Company shall cause DTB to transfer the
Capital Stock of the Hotel Subsidiaries to the Hotel Holding Company which, in
turn, will be owned 100% by CR Hotel. The transactions contemplated by Article
XV of the Bancomer Agreement will be undertaken at Closing or promptly
thereafter as provided in the Bancomer Agreement.
Section 2.4 Agreements Concerning Ancillary Matters. In connection with
the Transactions, the parties hereto agree to the following.
(a) Right of First Refusal.
(i) The Company intends to develop additional timeshare
businesses and projects. In such connection the Company may acquire or
develop hotel facilities in conjunction with such timeshare projects. If
the Company elects to provide for third party equity participation in
such hotel facilities, then the Company shall offer the Buyer a right of
first refusal with respect thereto on mutually agreeable terms. The
right of first refusal shall require that any hotel project or interest
therein acquired provide in connection therewith or in the operation of
the hotel property thereafter for management of the hotel by a manager
which does not operate a hotel competitive with the project in the same
local market.
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(b) Right of First Offer. Buyer, CR Hotel and the Company agree
that:
(i) If the Company or Buyer desires to sell (the "Selling
Party") its interest in CR Hotel (or any portion thereof), then such
party shall first give notice to the other party (a "Sale Notice") which
shall constitute a request for an offer to purchase the interest of the
Selling Party by the other party. The other party shall have a period of
thirty (30) days thereafter to make a written offer (the "First Offer")
to the Selling Party to purchase such interest at the all cash price set
forth in the First Offer to the Selling Party. Such First Offer shall be
accepted or refused by the Selling Party within ten (10) days after its
receipt thereof. If the Selling Party does not accept the First Offer
from the other party within such ten (10) day period, then the Selling
Party may, within the ensuing 180 day period, sell its interest to a
third party but only at a price which is higher than the First Offer.
Failure by the other party to respond to a Sale Notice within the period
provided herein shall constitute a waiver of all rights of the other
party under this Section 0(b)(i) but only with respect to the particular
Sale Notice to which such failure relates. If the Selling Party does not
accept the First Offer, does not consummate a sale at a higher price
within the 180 day period after the date of delivery of the Sale Notice
and wishes to sell in more than 180 days after the date of delivery of
such notice, then the Selling Party shall be required to comply with the
foregoing procedures set forth in this Section 0(b)(i). The provisions
of this Section 0(b)(i) shall not be applicable to transfers to
affiliates or charges in control of such affiliates.
(c) Agreement Regarding Hotel Business. Buyer shall through CR
Hotel and the Hotel Subsidiaries have exclusive control of the Hotel Business
provided that Buyer shall consult with the Company on a regular basis with
respect thereto. Buyer shall have the option to cause the Hotel Subsidiaries to
enter into a management agreement (the "Hotel Management Agreement") with
Manager in accordance with the provisions hereof. The Hotel Management Agreement
if entered into with Manager shall be in a form utilized generally by Manager
with respect to other properties managed by Manager. Buyer shall cause the
existing management agreements between Westin and DTB and/or its subsidiaries to
be terminated without penalty as of the Closing Date. The management agreement
or franchise agreement, as the case may be, entered into at the Closing or
promptly thereafter, including, the Hotel Management Agreement (if with Manager)
shall be subject to approval of the Company which shall not be unreasonably
withheld, delayed or conditioned. The Hotel Management Agreement shall contain
provisions no less favorable to the Hotel Subsidiaries than the following (it
being agreed that the following provisions are acceptable):
(i) Manager shall receive an annual base management fee
equal to 3% of gross revenues of the Hotel Business;
(ii) Manager shall receive an annual incentive management
fee equal to (A) 10% of NOI of the Hotel Business above $16 million and
(B) 20% of NOI of the Hotel Business above $19 million; provided,
however, in no event shall the incentive
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management fee in any year exceed 5 1/4% of the gross revenues of the
Hotel Business.
(iii) The Hotel Management Agreement shall have a term of
twenty (20) years. In the event the Hotel Business is sold to an
unrelated third party prior to the end of the term (but after year 5
prior to which there shall be no termination right), a termination fee
shall be paid to Manager equal to three times the prior year base fee
and incentive management fees (annually, the "Aggregate Annual Fees"),
reduced to two times Aggregate Annual Fees after year 7, and to
Aggregate Annual Fees after year nine. There shall be no termination fee
payable on a sale after year ten. The termination fee shall be
applicable on a pro-rata basis in the case of a sale of less than all of
the Hotel Business.
(iv) The hotels shall be operated under the name "Xxxxxx
Xxxxxx" so long as Manager is operating the hotels or the hotel is being
operated pursuant to a franchise with Manager.
(d) Cross Use of Facilities.
(i) CR Hotel and the Company shall allocate the costs of
certain services and property between the Hotel Businesses and the
Timeshare Business on substantially the same basis as is being currently
allocated between the Hotel Business and Timeshare/Other Business as
reflected in the financial statements of Manager and DTB. In addition,
Buyer agrees to cause CR Hotel to cause the Hotel Business to continue
to provide the services and amenities to Club Xxxxxx members on
substantially the same basis as is currently being provided by the Hotel
Business to Club Xxxxxx members. In addition, Buyer shall, and shall
cause CR Hotel to, support the Timeshare Business with respect to
marketing on substantially the same basis as is currently being provided
by Westin and the Hotel Business. Buyer and the Company shall endeavor
to enter into written agreements which document the above referenced
services, amenities and support currently provided to the Timeshare
Business and Club Xxxxxx and the terms and conditions on which such
services, amenities and support are currently provided.
(ii) Buyer and the Company agree that a Xxxxxx Advisory
Committee will be formed to promote the Hotel Business and the Timeshare
Business and the working relationships between CR Hotel, Manager and the
Company and that such committee shall have advisory authority with
respect to all related matters such as relations with employees, labor
union contracts and negotiations, insurance, capital expenditures,
auditors and property management personnel. Xxxx XxXxxxxx, two other
Company representatives, two Buyer representatives and one Manager
representative shall be on this Committee. This Committee shall meet not
less often than quarterly and more often as the Company, Capital and/or
Buyer deem appropriate. It is not intended that this Committee will have
any legal power or authority but shall provide advice and
recommendations as it deems desirable to CR Hotel and the Company.
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(e) Escrow Agreement. On or before May 16, 1997, Buyer shall
deposit the Escrow Deposit into the escrow account as contemplated by the Escrow
Agreement.
(f) Agreement to Transfer Timeshare/Other Properties to the
Company.
(i) Buyer hereby agrees to cause CR Hotel to transfer
legal title to all assets held with respect to the Timeshare/Other
Business as provided in the Bancomer Agreement.
(ii) Buyer and the Company agree that the Transfer Taxes
associated with transferring the Timeshare/Other Business assets as
provided in the Bancomer Agreement shall be borne 50% by Buyer and 50%
by the Company.
(iii) Buyer and Company agree that title insurance with
respect to the Hotel Properties except to the extent paid for by
Bancomer shall be borne 50% by Buyer and 50% by Company and the title
insurance with respect to the Timeshare Properties except to the extent
paid for by Bancomer shall be borne 50% by Buyer and 50% by Company.
(g) Use of "Xxxxxx" Name. Buyer and the Company agree that the Company
shall own all rights to the Club Xxxxxx name and that it shall xxxxx XX Hotel a
royalty-free license in perpetuity to use the "Xxxxxx" name at the Hotel
Properties at no cost.
Section 2.5 Possible Pink Tower Conversion. Buyer and the Company will
explore the economic feasibility of converting that certain structure known as
the "Pink Tower" located at the Hotel Property in Cancun, to Timeshare property
on a joint venture basis or sale at fair market value or such other terms and
conditions as Buyer and the Company may agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RAINTREE AND THE COMPANY
Raintree and the Company hereby represent and warrant to Buyer as of
the date hereof and as of the Closing Date (except that representations and
warranties that are made as of a specific date need be true only as of such
date) as follows:
Section 3.1 Organization and Good Standing. The Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has engaged in no business other than the
entering into of the Bancomer Agreement, this Agreement and performance
thereunder. Raintree is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization.
Section 3.2 Authorization and Validity. Raintree and the Company
have all requisite power and authority to enter into this Agreement and, subject
to obtaining all Requisite Regulatory Approvals referenced in Section 0, to
carry out its obligations hereunder. Each of the
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execution, delivery and performance by the Company and Raintree of this
Agreement has been duly authorized by all requisite action. This Agreement is
Enforceable against the Company and Raintree.
Section 3.3 Organization and Good Standing of the Relevant Company
Subsidiaries. Each Relevant Company Subsidiary will be duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and by the Closing Date will have all requisite corporate power and
authority to own, lease and operate all properties and assets then owned, leased
or operated by it and to carry on its business as then conducted. As of the
Closing Date, each Relevant Company Subsidiary will be duly qualified to conduct
business in all jurisdictions in which the nature of the business transacted by
it requires qualification.
Section 3.4 Capitalization of the Company. As of the Closing Date, the
authorized Capital Stock of the Company will be duly authorized, and when
issued, validly issued, fully paid and non-assessable. Xxxxxxx X. Xxxx is the
record owner of all of the Capital Stock of the Company as of the date hereof.
There are no Commitments or preemptive rights with respect to the Capital Stock
of the Company which would effect the Company's ability to perform in accordance
with the provisions of this Agreement.
Section 3.5 Capitalization of the Relevant Company Subsidiaries. All of
the Capital Stock of each Relevant Company Subsidiary will, on the Closing Date,
be duly authorized, validly issued, fully paid and non-assessable. As of the
Closing Date, the Company shall own directly or indirectly all of the issued and
outstanding Capital Stock of each Relevant Company Subsidiary free and clear of
all Liens and encumbrances other than as contemplated by the Bancomer Agreement.
There will be no Commitments or preemptive rights with respect to the Capital
Stock of the Relevant Company Subsidiaries except as required generally with
respect to such Capital Stock under Mexican law.
Section 3.6 Consents and Approvals. Except as required by the Bancomer
Agreement, as of the Closing Date, no Requisite Regulatory Approval applicable
to the Transactions which has not been obtained is required to be obtained by
the Company, Raintree or any of the Relevant Company Subsidiaries from, and no
notice or filing will be required to be given by the Company, Raintree or the
Relevant Company Subsidiaries to or made by the Company, Raintree or the
Relevant Company Subsidiaries with, any Governmental Body or other Person in
connection with the execution, delivery and performance by the Company of this
Agreement.
Section 3.7 Non-Contravention. As of the Closing Date, the execution,
delivery and performance by the Company and by Raintree of this Agreement and
the consummation of the Transactions by the Company will not (i) violate any
provision of the Certificate of Incorporation, Bylaws (or other similar
documents) or other organizational documents of the Company, Raintree or any
Relevant Company Subsidiary, (ii) subject, as to performance, to obtaining the
consents referred to in Section 0, (A) result in the breach of, or constitute a
default under, or result in the termination, cancellation or acceleration
(whether after the giving of notice or the lapse of time or both) of any right
or obligation or the Company, Raintree or any Relevant
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Company Subsidiary under, or to a loss of any benefit to which the Company,
Raintree or any Relevant Company Subsidiary is entitled under, any contract or
other instrument to which the Company, or any Relevant Company Subsidiary is a
party or (B) except as contemplated by the Bancomer Agreement, result in the
creation of any Lien upon any of the Capital Stock of the Company, Raintree or
any Relevant Company Subsidiary, or (iii) to the knowledge of the Company and/or
Raintree, violate or result in a breach of or constitute a default under any
order or Law applicable to the Company, Raintree or any Relevant Company
Subsidiary, including any Governmental Body approval.
Section 3.8 Absence of Undisclosed Liabilities of the Company and the
Relevant Subsidiaries. Except as contemplated by this Agreement or the Bancomer
Agreement, the Company and each Relevant Company Subsidiary is not subject to
any Liabilities.
Section 3.9 Litigation and Claims. There is no pending Proceeding that
has been commenced by or against the Company, Raintree or any Relevant Company
Subsidiary that would be expected to materially and adversely affect the
Company, Raintree, the Transactions or impair the ability of the Company to
perform under the Bancomer Agreement.
Section 3.10 Compliance with Laws. From their inception, the businesses
of the Company and each Relevant Company Subsidiary will have been conducted in
compliance with all applicable Laws (including, but not limited to, those
relating to licenses and permits for the ownership, occupancy and operation of
its properties). The Company has or will have by the Closing Date all
Governmental Body approvals necessary for the conducting of its businesses as
currently (and as planned to be) conducted and, by the Closing Date, each
Relevant Company Subsidiary will have all Governmental Body approvals necessary
for the conducting of its business as then conducted. There are no proceedings
pending or, to the knowledge of the Company and/or Raintree, threatened which
may result in the revocation, cancellation or suspension of any such
Governmental Body approval. As of the date hereof, no investigation or review by
any Governmental Body (including, but not limited to, any audit or similar
review by any Federal, state or local taxing authority) with respect to the
Company or any of its respective properties is, to the knowledge of the Company,
pending or threatened.
Section 3.11 Contracts. This Agreement, the Bancomer Agreement, and the
agreements contemplated thereby are the only contracts to which the Company and
each Relevant Company Subsidiary is or, to the Company's knowledge, will be a
party or to which any of their businesses, or properties is or, to the Company's
knowledge, will be subject.
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Section 3.12 Finder's Fees and Advisors' Fees. Neither Raintree nor the
Company has dealt with any broker or finder in connection with the Transactions,
and no broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions contemplated hereby or by the Bancomer
Agreement other than Jefferies & Company, Inc. Raintree and the Company agree to
indemnify and hold harmless Buyer against any Liability incurred because of any
brokerage commission or finder's fee alleged to be payable because of any act,
omission or statement of the indemnifying party. The Company is solely
responsible for any obligations to Jefferies & Company, Inc.
Section 3.13 Bancomer Agreement. Nothing has come to the attention of
Raintree or the Company after due inquiry which would cause either Raintree or
the Company to believe that any of the representations and warranties of
Bancomer set forth in the Bancomer Agreement are not true and correct.
Section 3.14 Confirmation. Raintree and Buyer confirm that each of the
representations and warranties of the Company under the Bancomer Agreement are
true and correct.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Raintree and the Company as of the
date hereof and as of the Closing Date (except that the representations and
warranties that are made as of a specific date need be true only as of such
date) as follows:
Section 4.1 Organization and Good Standing of Buyer. Buyer is a limited
partnership duly organized, validly existing and in good standing under the law
of the jurisdiction of its incorporation.
Section 4.2 Buyer's Authorization and Validity. Buyer has all requisite
power and authority to enter into this Agreement and subject to obtaining all
Requisite Regulatory Approvals referenced in Section 0 to carry out its
obligations hereunder and thereunder. Each of the execution, delivery and
performance by Buyer of this Agreement has been duly authorized by all requisite
action. This Agreement is Enforceable against Buyer.
Section 4.3 Consents and Approvals. Except as may be required under the
laws of Mexico or any subdivision or agency thereof, no Requisite Regulatory
Approval applicable to the Transactions which has not been obtained is required
to be obtained by Buyer from, and no notice or filing is required to be given by
Buyer to or made by Buyer with, any Governmental Body or other Person in
connection with the execution, delivery and performance by Buyer of this
Agreement.
Section 4.4 Non-Contravention of Buyer. The execution, delivery and
performance by Buyer of this Agreement, and the consummation of the
Transactions, do not and will not (i) violate any provision of the Certificate
of Limited Partnership, Agreement of Limited Partnership
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(or other similar documents) or other organizational documents of Buyer, (ii)
subject, as to performance, to obtaining the consents referred to in Section 0
(A) result in the breach of, or constitute a default under, or result in the
termination, cancellation or acceleration (whether after the giving of notice or
the lapse of time or both) of any right or obligation of Buyer under, or to a
loss of any benefit to which Buyer is entitled under, any contract or other
instrument to which Buyer is a party or (B) except as contemplated by the
Bancomer Agreement or by this Agreement, result in the creation of any Lien upon
the LLC Interests to be held by the Company or (iii) to the knowledge of Buyer,
violate or result in a breach of or constitute a default under any order or Law
applicable to Buyer, including any Governmental Approval.
Section 4.5 Finder's Fees. Buyer represents and warrants that it has
dealt with no broker or finder in connection with any of the Transactions, no
broker or other person is entitled to any commission or finder's fee in
connection with any of the Transactions except as set forth in Section 0. Buyer
agrees to indemnify and hold harmless Raintree, CR Hotel and the Company against
any Liability incurred because of any brokerage commission or finder's fee
alleged to he payable because of any act, omission or statement of Buyer.
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ARTICLE V
COVENANTS
Section 5.1 Access.
(a) Prior to the Closing, Raintree and the Company shall permit
Buyer and its representatives to have access, during regular business hours and
upon reasonable advance notice, to all information, wherever located, obtained
by Raintree or the Company from Bancomer under the Bancomer Agreement or from
any advisors or other source with respect to the Transactions under the control
or direction of Raintree and/or the Company.
(b) In the event of the termination of this Agreement, Buyer
shall promptly deliver to the Company, all original documents, work papers and
other material obtained by Buyer or on its behalf from Raintree and the Company,
or any of their respective agents, employees or representatives as a result
hereof or in connection herewith whether so obtained before or after the
execution hereof. Buyer shall at all times prior to the Closing Date, and in the
event of termination of this Agreement, cause any information so obtained to be
kept confidential and will not use, or permit the use of, such documents, work
papers and other materials in its business or any other manner or for any other
purpose except as contemplated hereby. The foregoing shall not preclude Buyer
from (i) disclosing any information obtained from Raintree or the Company to
Buyer's consultants, accountants, legal advisors or other similar
representatives, (ii) using or disclosing such information which currently is
known generally to the public or which subsequently has come into the public
domain, other than because of disclosure in violation of this Agreement, (iii)
using or disclosing of such information that becomes available to Buyer on a
non-confidential basis from a source other than Raintree, the Company or
Raintree's or the Company's agents provided that such source does not have an
obligation prohibiting the disclosure of such information, (iv) disclosure to
Buyer's officers, directors and/or affiliates or (v) disclosing such information
required by Law or court order, provided, that, as soon as Buyer has knowledge
of the requirement for such disclosure, Buyer will promptly give the Company
oral and then written notice of the nature of the Law or order requiring
disclosure and the disclosure to be made in accordance therewith.
Section 5.2 Taking of Necessary Action. Subject to this Agreement and
Law, Buyer, Raintree and the Company shall use their best efforts promptly to
take or cause to be taken all action and promptly to do or cause to be done all
things necessary, proper or advisable under applicable Laws and regulations to
consummate and make effective the Transactions. Without limiting the foregoing,
each of Buyer and the Company shall, and the Company shall cause each of its
Subsidiaries to, use their best efforts to obtain and make all consents,
approvals, assurances or filings of or with third parties and Governmental
Bodies necessary for the consummation of the Transactions. Each of the parties
shall cooperate with the others in good faith to help the other satisfy its
obligations under this Section 0. If at any time after the Closing Date any
further action is necessary or desirable to carry out the purpose of this
Agreement, including, without limitation, to vest the Hotel Holding Company or a
Subsidiary thereof and the Timeshare Holding Company or a Subsidiary thereof
with full title to all properties, assets, rights, approvals immunities and
franchises of the Hotel Business and the Timeshare Business, respectively, the
proper officers or directors of each party to this Agreement shall take that
necessary action.
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Section 5.3 Transactional Services.
(a) At Closing (i) Starwood and (ii) the Company shall each pay
by wire transfer 50% of all third party fees and expenses incurred by Starwood
and the Company in connection with the transactions contemplated hereby and by
the Bancomer Agreement and the Capital Agreement other than the fees and
expenses of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. and Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Quentel, provided, Starwood's share of fees and
expenses incurred by the Company shall not exceed $500,000; and provided,
further, that 30% of the Starwood obligation pursuant to this Section 5.3(a)
shall be paid by Capital pursuant to Section 5.3(a) of the Capital Agreement
(not to exceed $150,000) and 70% of the Starwood obligation will be paid by
Buyer pursuant hereto (not to exceed $350,000). Nothing in this Agreement,
including, without limitation, in this Section 0(a), shall limit the right of
Buyer, Capital or the Company to engage any counsel, accountant or other advisor
at its own expense subject to the obligation to make payments for services
rendered in accordance with the provisions of this Section 0(a).
(b) The services and work product of Xxxxxxxxxxx y Steta, counsel
to the Company in Mexico for the Bancomer Transactions shall also be for
Starwood's benefit. Starwood (or Buyer and Capital separately as they may
determine) may engage their own Mexican local counsel, the expense for which
shall be allocated as contemplated by Section 5.3(a) of this Agreement in the
case of Buyer and Section 5.3(a) of the Capital Agreement in the case of
Capital. It is understood that Ernst & Young has been engaged to conduct a
USGAAP audit of the historical financial statements of DTB as well as a review
of interim financial statements on a USGAAP basis, and to provide tax and
related advisory services. It is contemplated that Ernst & Young will provide
Buyer with a complete briefing of its tax and financing analysis of the Bancomer
Transactions. The Company and Buyer will consult as to the engagement of other
tax advisors, accountants, consultants or attorneys for the Bancomer
Transactions to supplement the work done to date. All other consultants
previously engaged by the Company and the work product thereof will be made
available to Buyer.
Section 5.4 Notice of Certain Changes. Each party hereto shall give
prompt written notice to the other party hereto of the occurrence or
non-occurrence, of any event which would be likely to cause any representation
or warranty herein to be untrue or inaccurate, or any covenant, condition or
agreement herein not be complied with or satisfied.
Section 5.5 Press Releases. The Company and Buyer shall consult with
each other as to the timing, form and substance of any press release or public
disclosure of matters related to this Agreement or any of the transactions
contemplated by this Agreement; provided, however; that nothing in this Section
0 shall be deemed to prohibit any party to this Agreement from making any
disclosure that if required to fulfill that parry's disclosure obligations
imposed by Law or stock exchange requirements.
Section 5.6 Bancomer Agreement. Buyer and the Company shall each have
the right
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to approve any modifications to the Bancomer Agreement and any decisions or
actions taken with respect thereto prior to the Closing Date which approvals
shall not be unreasonably withheld, delayed or conditioned, including, without
limitation, the approval of the Ancillary Agreements and the continuation of
beneficial interests of Bancomer pursuant to Section 2.4(d) of the Bancomer
Agreement. Buyer and the Company shall seek the agreement of Bancomer to (i) pay
for the title insurance contemplated by the Bancomer Agreement and (ii) apply
the "Defects" deduction contemplated by the Bancomer Agreement as an offset
against cash due Bancomer at the closing under the Bancomer Agreement. In the
event of a default by Bancomer under the Bancomer Agreement, Buyer and the
Company shall agree upon any and all actions to be taken in connection
therewith. In the event that damages are obtained against Bancomer pursuant to
Section 10.2(f) of the Bancomer Agreement, such damages shall be shared equally
between Starwood and the Company after payment of all reasonable legal fees and
expenses of Starwood and the Company in connection therewith. From and after the
Closing Date, the Company shall have the right to enforce all rights under the
Bancomer Agreement relating to the Timeshare/Other Business, to make all
decisions thereunder in connection therewith and to enforce all indemnification
provisions thereof with respect to matters related to the Timeshare Business.
From and after the Closing date, CR Hotel shall have the right to enforce all
rights under the Bancomer Agreement relating to the Hotel Business and to make
all decisions thereunder in connection therewith and to enforce all
indemnification provisions thereof with respect to matters related to the Hotel
Business.
Section 5.7 Hotel Subsidiary and Hotel Holding Company Organizational
Documents. Buyer shall have the right to approve prior to the Closing the
organizational documents of each of the Hotel Subsidiaries and the Hotel Holding
Company and the Boards of Directors thereof for the purpose of ensuring that
Buyer through CR Hotel shall have the exclusive right from and after the Closing
Date to control such corporations.
Section 5.8 Co-Buyer. Buyer and the Company shall consult with Mexican
counsel promptly following the date hereof to determine if any Requisite
Regulatory Approvals would be required to provide Starwood with the rights under
Section 6.6 of the Bancomer Agreement as a "Co-Buyer" as defined therein. In the
event that Mexican counsel advises that no Requisite Regulatory Approvals are
required in connection therewith, the Company shall notify Bancomer that
Starwood is a "Co-Buyer" under Section 6.6 of the Bancomer Agreement. In the
event that any Requisite Regulatory Approvals would be so required to provide
such rights to Starwood, Starwood agrees that it will not require that the
Company request that Starwood be made a "Co-Buyer" under the Bancomer Agreement
if allocation for such Requisite Regulatory Approvals would delay the closing
under the Bancomer Agreement.
Section 5.9 Requisite Regulatory Approvals. In the event that Buyer
determines upon advice of Mexican counsel that the transaction structure
contemplated by this Agreement may require a Requisite Regulatory Approval that
would delay the closing under the Bancomer Agreement, the parties hereto, at the
election of the Buyer, will restructure the transaction whereby Buyer will
become a non-member manager of CR Hotel and will make a participating loan
thereto, in each case, in such manner as to duplicate as nearly as possible the
transaction
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structure and the economics contemplated by this Agreement pursuant to
documentation required by Buyer subject to the Company's prior written approval
which shall not be unreasonably withheld, delayed or conditioned. The Company
shall diligently, continuously and in good faith use all reasonable commercial
efforts to obtain the assistance of Bancomer in connection with all Requisite
Regulatory Approvals required to effectuate the transactions in the form
contemplated by this Agreement.
Section 5.10 Restructuring. The parties agree to continue to analyze
the transaction structure and to restructure same as the parties may under such
circumstances agree, provided that none of the parties will suffer any economic
or other detriment in connection with such restructuring.
Section 5.11 Working Capital Adjustment. The Company and Buyer shall
adjust as between the Hotel Business and the Timeshare/Other Business at the
Closing the "Working Capital" of DTB.
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 Conditions to the Obligations of Buyer and the Company. The
obligations of the parties hereto to effect the Closing are subject to the
satisfaction (or waiver prior to the Closing) of the following conditions:
(a) (i) No order and no other legal restraint or prohibition that
would prevent, enjoin or have the effect of preventing the consummation of the
transactions contemplated by this Agreement or the Bancomer Agreement shall be
in effect; provided, however, that no party may invoke this condition unless
such party shall have complied fully with its obligations under Section 0 and,
in addition shall have used all commercially reasonable efforts to have any such
order vacated; and
(ii) There shall not be commenced or threatened in writing, or be
continuing, any Proceeding which would prevent, enjoin or have the effect of
preventing the consummation of the transactions contemplated by this Agreement
and/or the Bancomer Agreement.
(iii) The Bancomer Agreement shall have been executed and
delivered by the parties thereto in substantially the form attached hereto as
Exhibit A hereto or, at Buyer's option, a closing shall have occurred under the
existing agreements of the Company and CR Hotel with respect to the acquisition
contemplated by the Bancomer Agreement.
(b) All Requisite Regulatory Approvals required under this
Agreement shall have been made or obtained and shall be in full force and affect
and shall not have expired or been rescinded.
(c) All conditions precedent to the obligations of the Company to
closing of
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the Bancomer Transactions shall have been satisfied or waived by the Company and
Buyer.
(d) The Company and the Buyer shall have entered into the
Operating Agreement of CR Hotel which shall contain such terms and conditions as
Buyer and the Company shall agree consistent with the terms hereof.
(e) The Company and the Buyer shall have approved the Ancillary
Agreements.
(f) The closing under the Capital Agreement shall occur
concurrently herewith.
Section 6.2 Conditions to the Obligations of Buyer. The obligation of
Buyer to effect the Closing is subject to the satisfaction (or waiver by the
Buyer) prior to the Closing of the following conditions:
(a) The representations and warranties of the Company contained
herein shall have been true and correct in all material respects when made and
shall be true and correct in all material respects as of the Closing, as if made
as of the Closing (except that representations and warranties that are made as
of a specific date need be true in all material respects only as of such date).
(b) The Company shall have delivered to Buyer the certificates
representing the Purchased LLC Interests.
(c) The covenants and agreements of the Company to be performed
on or prior to the Closing shall have been performed in all material respects.
(d) Title insurance with respect to the real property and
improvements used in connection with the Hotel Business shall have been
delivered in accordance with the provisions of the Bancomer Agreement.
Section 6.3 Conditions to the Obligations of the Company. The
obligation of the Company to effect the Closing is subject to the satisfaction
(or waiver prior to the Closing) of the following conditions:
(a) The representations and warranties of Buyer contained herein
shall have been true and correct in all material respects when made and shall be
true and correct in all material respects as of the Closing, as if made as of
the Closing (except that representations and warranties that are made as of a
specific date need be true in all material respects only as of such date).
(b) The covenants and agreements of Buyer to be performed on or
prior to the Closing shall have been duly performed in all material respects.
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ARTICLE VII
SURVIVAL; INDEMNIFICATION
Section 7.1 Survival. The representations and warranties of the Company
and Buyer contained in this Agreement and any document, instrument or
certificate delivered in connection with the Transactions shall survive the
Closing.
Section 7.2 Indemnification by Raintree and the Company. Raintree and
the Company agree to indemnify and hold harmless Buyer and its officers,
directors, shareholders, Affiliates, employees and agents (the "Buyer
Indemnitees") from any and all Damages, directly or indirectly resulting from,
relating to, arising out of or attributable to: (a) any breach of or inaccuracy
in any representation or warranty of the Company and/or Raintree contained in
this Agreement, and (b) subject to Section 9.2, any breach or nonperformance,
partial or total, by the Company and/or Raintree of any covenant or agreement of
the Company and/or Raintree contained in this Agreement.
Section 7.3 Indemnification by Buyer. Buyer agrees to indemnify and
hold harmless the Company and Raintree and their officers, directors,
shareholders, Affiliates, employees and agents (the "Company Indemnities") from
any and all Damages, directly or indirectly resulting from, arising out of or
attributable to: (a) any breach of or inaccuracy in any representation or
warranty of Buyer contained in this Agreement, and (b) subject to Section 9.2,
any breach or non-performance, partial or total, by Buyer of any covenant or
agreement of Buyer contained in this Agreement.
Section 7.4 Notice, Participation and Duration. If a claim by a third
party is made against a party indemnified pursuant to this Article VII
("Indemnitee"), and if such Indemnitee intends to seek indemnity with respect
thereto under this Article VII, the Indemnitee shall promptly, and in any event
within 10 days of the assertion of any claim or the discovery of any fact upon
which Indemnitee intends to base a claim for indemnification under this
Agreement (a "Claim"), notify the party or parties from whom indemnification is
sought (the "Indemnitor") of such Claim. Upon any Claim, Indemnitor, at its
option, may assume (with legal counsel reasonably acceptable to the Indemnitee)
the defense of any Proceeding in connection with the Indemnitee's Claim, and may
assert any defense of Indemnitee or Indemnitor, provided that Indemnitee shall
have the right at its own expense to participate jointly with Indemnitor in the
defense of any Proceeding in connection with the Indemnitee's Claim and
provided, further, if Indemnitee has interests in such matters which are or
which may be adverse to Indemnitor, then, in such event, Indemnitor shall pay
all reasonable costs of Indemnitee's counsel. If Indemnitor elects to undertake
the defense of any Claim hereunder, Indemnitee shall cooperate with Indemnitor
to the extent reasonably requested in regard to all matters relating to the
Claim (including, without limitation, corrective actions required by applicable
Law, assertion of defenses and the determination, negotiation and settlement of
all Damages) so as to permit Indemnitor's management of the same with regard to
the amount of Damages payable to Indemnitor hereunder. Indemnitor shall not
settle any indemnifiable Claim without the prior
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written consent of Indemnitee unless such settlement involves only the payment
of money by Indemnitor and the claimant provides to Indemnitee a release, in
form and substance reasonably satisfactory to Indemnitee, from all Liability in
respect of such Claim.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing.
(a) by written agreement of the Company and Buyer;
(b) by the Company after the occurrence and during the
continuation of a Default by Buyer under this Agreement and/or by Capital under
the Capital Agreement, provided that no Default or event which, with notice
and/or the lapse of time, would constitute a Default by the Company (other than
a Default caused by Buyer's Default) shall have occurred and be continuing;
(c) by Buyer after the occurrence and during the continuation of
a Default by the Company under this Agreement and/or by the Company under the
Capital Agreement, provided that no Default, or event which, with notice and/or
the lapse of time, would constitute a Default, by Buyer (other than a Default
caused by the Company's Default) shall have occurred and be continuing.
(d) by Buyer, if the conditions precedent to Buyer's obligation
to close hereunder have not been satisfied prior to the Termination Date.
(e) by the Company, if the conditions precedent to the Company's
obligation to close hereunder have not been satisfied prior to the Termination
Date (other than conditions precedent related to default by Bancomer under the
Bancomer Agreement which shall be subject to the provisions of Section 8.2).
Termination of this Agreement pursuant to this Section 0 shall be effected by
written notice by the party terminating this Agreement to the other party of the
termination and the basis for such termination.
Section 8.2 Buyer Termination Option. Buyer shall have the right to
terminate this Agreement if Bancomer shall default under the Bancomer Agreement,
provided, however, that so long as Buyer has not exercised its right to
terminate this Agreement pursuant to this Section 0 in the event of a default by
Bancomer under the Bancomer Agreement, Buyer and the Company shall diligently
seek to enforce the rights of the Company and CR Hotel under the Bancomer
Agreement in a prudent manner.
Section 8.3 Effect of Termination. In the event of the termination of
this Agreement
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in accordance with Section 0 or Section 0 this Agreement shall thereafter become
void and have no effect, and no party hereto shall have any Liability to the
other party hereto or their respective Affiliates, directors, officers or
employees, except for the obligations of the parties hereto contained in this
Section 0 and in Sections 0(b) and 0 and Articles VII, IX and X, and except that
nothing herein will relieve any party from liability for any breach of this
Agreement prior to such termination, (ii) unless terminated by the Company
pursuant to Section 8.1(b), the Escrow Deposit shall be returned to Buyer
immediately together with all interest accrued thereon, and (iii) if terminated
by the Company pursuant to Section 8.1(b) the Escrow Deposit shall be applied as
directed by a court of competent jurisdiction.
ARTICLE IX
REMEDIES
Section 9.1 Equitable Remedy. Each of the Company and Buyer acknowledge
that they will be irreparably damaged (and Damages at law would be an inadequate
remedy) if this Agreement is not specifically enforced. Therefore, in the event
of a breach of threatened breach by any party of any provision of this
Agreement, then the other parties shall be entitled, in addition to all other
rights or remedies provided for hereunder, to an injunction restraining such
breach without being required to show any actual Damage or to post an injunction
bond, and/or to obtain a decree for specific performance of the provisions of
this Agreement.
Section 9.2 Damages.
(a) In no event shall any consequential, incidental,
expectation or punitive damages be permitted hereunder; it being agreed that the
Company's remedy for default by Buyer shall be to bring an action for specific
performance and recovery of its out-of-pocket costs.
(b) The Company hereby acknowledges that Buyer may suffer
Damages as a result of a Default hereunder. Accordingly if for any reason the
Company defaults under this Agreement, Buyer, at its sole election may pursue
against the Company an action for specific performance of this Agreement. In no
event shall any consequential, incidental, expectation or punitive damages be
permitted hereunder, it being agreed that Buyer's remedy for default by the
Company and/or Raintree shall be to bring an action for specific performance and
recovery of its out-of-pocket costs.
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ARTICLE X
MISCELLANEOUS
Section 10.1 Due Diligence. Buyer shall perform a due diligence review
of the Hotel Business and Raintree and the Company shall fully cooperate with
Buyer in connection therewith; provided, however, that such due diligence review
shall be only for Buyer's informational purposes except notwithstanding any
other provisions of this Agreement, Buyer may upon written notice to the Company
and Raintree on or prior to noon on May 20, 1997 terminate this Agreement based
upon its due diligence review (the determination of which shall be in the sole
and absolute discretion of Buyer), in which event, the Escrow Deposit shall be
immediately returned to Buyer (together with all interest accrued thereon) and
no parties hereto shall have any further obligation hereunder except as
expressly provided herein. No investigation by any party to this Agreement into
the business, operations and condition of any other party shall diminish in any
way the effect of any representations or warranties made by such other party in
this Agreement or shall relieve such other party of any of its obligations under
this Agreement. The parties agree that any item disclosed on any schedule to
this Agreement shall be deemed to be disclosed for all purposes of this
Agreement, notwithstanding the fact that such item was not disclosed on any
other schedule to this Agreement.
Section 10.2 Notices. All notices, requests, consents and other
communications required or permitted under this Agreement shall be in writing
(including electronic transmission) and shall be (as elected by the person
giving such notice) hand delivered by messenger or courier service,
electronically transmitted, or mailed (airmail if international) by registered
or certified mail (postage prepaid), return receipt requested, addressed to:
To Buyer: With a copy (which shall not
constitute notice) to:
SLT Realty Limited Partnership Xxxxxxxxx Xxxxxxx
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000 000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx Attn: Xxxxxx X. Ivanhoe, Esq.
(000) 000-0000 (000) 000-0000
Telefax: (000) 000-0000 Telefax: (000) 000-0000
To Raintree or the Company: With a copy (which shall not
constitute notice) to:
Raintree Capital Company LLC. Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
Pennzoil Place - South Tower Pennzoil Place - South Tower
Suite 2310, 000 Xxxxxxxxx Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxx Attn: Xxxxx X. Xxxxxxxx, Esq.
(000) 000-0000 (000) 000-0000
Telefax: (000) 000-0000 Telefax: (000) 000-0000
or to such address as any party may designate by notice complying with the terms
of this Section. Each such notice shall be deemed delivered (a) on the date
delivered if by personal delivery; (b) on the date of transmission with
confirmed answer back if by electronic transmission; and (c) on
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the date upon which the return receipt is signed or delivery is refused or the
notice is designated by the postal authorities as not deliverable, as the case
may be, if mailed.
Section 10.3 Amendment; Waiver. The provisions of this Agreement may
not be amended, supplemented, waived or changed orally, but only by a writing
signed by the party as to whom enforcement of any such amendment, supplement,
waiver or modification is sought and making specific reference to this
Agreement;
Section 10.4 Assignment. Except as provided in this Section 0, no
party shall assign his or its rights and/or obligations under this Agreement
without the prior written consent of each other party to this Agreement. Buyer
shall have the right to assign its rights hereunder to one or more affiliates
thereof provided that such affiliate or affiliates, as the case may be, has the
ability to perform all obligations hereunder, including, without limitation, to
make the cash payment to Bancomer required in accordance with the provisions
hereof.
Section 10.5 Binding Effect. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties and their respective legal representatives, successors and permitted
assigns, whether so expressed or not.
Section 10.6 Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter hereof, and supersedes all other negotiations, understandings and
representations (if any) made by and between such parties.
Section 10.7 Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any Person other than Buyer, Raintree, the Company or
their successors or permitted assigns, any rights or remedies under or because
of this Agreement.
Section 10.8 Public Disclosure. Notwithstanding anything herein to the
contrary, each of the parties to this Agreement hereby agrees with the other
party hereto that, except as may be required to comply with the requirements of
any applicable Laws, and the rules and regulations of each stock exchange upon
which the securities of one of the parties is listed, no press release or
similar public announcement or communication shall, if prior to the Closing, be
made or caused to be made concerning the execution or performance of this
Agreement unless the parties shall have consulted in advance with respect
thereto.
Section 10.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. Confirmation of
execution by electronic transmission of a facsimile signature page shall be
binding upon any party so confirming.
Section 10.10 Submission to Jurisdiction; Selection of Forum. This
Agreement and all transactions contemplated by this Agreement shall be governed
by, and construed and enforced in
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accordance with, the laws of Delaware. Each party hereto agrees that it shall
bring any action or proceeding in respect of any claim arising out of or related
to this Agreement or the transactions contained in or contemplated by this
Agreement, whether in tort or contract or at law or in equity, exclusively in
Delaware (the "Chosen Courts") and solely in connection with claims arising
under this Agreement or the transactions contained in or contemplated by this
agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen
Courts, (ii) waives any objection to laying venue in any such action or
proceeding in the Chosen Courts, (iii) waives any objection that the Chosen
Courts are an inconvenient forum or do not have jurisdiction over any party
hereto and (iv) agrees that service or process upon such party in any such
action or proceeding shall be effective if notice is given in accordance with
Section 0 of this Agreement.
Section 10.11 Headings. The headings contained in this Agreement are
for convenience of reference only, are not to be considered a part of the
Agreement and shall not limit or otherwise affect in any way the meaning or
interpretation of this Agreement.
Section 10.12 Severability. If any provision of this Agreement or any
other agreement entered into pursuant hereto is contrary to, prohibited by or
deemed invalid under applicable law or regulation, such provision shall, be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given full force and effect so far as possible. If any provision of this
Agreement may be construed in two or more ways, one of which would render the
provision invalid or otherwise voidable or unenforceable and another of which
would render the provision valid and enforceable, such provision shall have the
meaning which renders it valid and enforceable.
Section 10.13 Third Parties. Unless expressly stated herein to the
contrary (including, without limitation, Sections 0 and 0, nothing in this
Agreement, whereto express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective legal representatives, successors and
permitted assigns. Nothing in this Agreement is intended to relieve or discharge
the Liability of any third persons to any party to this Agreement, nor shall any
provision give any third persons any right of subrogation or action over or
against any party to this Agreement.
Section 10.14 Incorporation of Exhibits, Schedules and Annexes. All
exhibits, schedules and annexes referred to in this Agreement and attached
hereto are hereby made a part of this Agreement by this reference.
Section 10.15 Waivers. The failure or delay of any party at any time tn
require performance by another party of any provision of this Agreement, even if
known, shall not affect the right of such party to require performance of that
provision or to exercise any right, power or remedy hereunder. Any waiver by any
party of any breach of any provision of this Agreement should not be construed
as a waiver of any continuing or succeeding breach of such provision, a waiver
of the provision itself, or a waiver of any right, power or remedy under this
Agreement. No notice to or demand on any party in any circumstances shall, of
itself, entitle such party to any other or further notice or demand in similar
or other circumstances.
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ARTICLE XI
POST CLOSING MATTERS
Buyer and the Company acknowledge and agree that (i) the matters
described in Article XV of the Bancomer Agreement shall occur at Closing, or as
promptly as practicable thereafter, and (ii) the separation of the Hotel
Business property and the Timeshare/Other Business property will require the
establishment of a condominium regime (or similar structure) for ownership,
management and operation of the common structural, support and amenity features
including, without limitation, the engine room, telephone system, television
network, fitness center, athletic facilities, swimming pools, storage facilities
and maintenance facilities.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the date first written above.
RAINTREE CAPITAL COMPANY LLC,
a Texas limited liability company
By:
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title:Executive Managing Director
CLUB XXXXXX RESORTS, INC.,
a Nevada corporation
By:
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
SLT REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: STARWOOD LODGING TRUST, a
Maryland corporation, general partner
By:
----------------------------------
Name: [ ]
Title: [ ]
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