EX-10.9 7 a2045342zex-10_9.txt EXHIBIT 10.9 EXHIBIT 10.9 CONFIDENTIAL TREATMENT REQUESTED LEASE AGREEMENT FOR COMMERCIAL USE PROPERTY ENTERED INTO, ON ONE HAND, BY TROPICAL CLUB DE IXTAPA, S.A. DE C.V., REPRESENTED HEREIN BY MR. BERNARDO DOMINGUEZ CERECERES AND HEREINAFTER REFERRED TO AS THE "LESSOR", AND, ON THE OTHER HAND, BY HOTELERA QUALTON, S.A. DE C.V., REPRESENTED HEREIN BY MR. JORGE LOPEZ NUNEZ AND HEREINAFTER REFERRED TO AS THE "LESSEE". RECITALS The LESSOR declares through its legal representative that: 1) It is a Commercial Company legally incorporated pursuant to Mexican law as evidenced by public deed number 11050 dated May ____ 1990, passed before the faith of Mr. Armando Galvez Perez Aragon, Notary Public number 103 in Mexico City, Federal District and recorded at the Public Registry of Property and Commerce in Mexico City, Federal District, under commercial folio number 135244. Additionally, its corporate purpose includes, among others, the following: "Commerce and industry, in general, but specifically focused towards the development, construction, operation and management of tourist centers and destinations of all kinds located in Mexico or abroad" and "Purchase, lease, sale, construction, management, use, operation, exchange and carrying out all kinds of similar legal transactions and acts with real estate property, whether developed or undeveloped, urban or rural, necessary for fulfilling the company's corporate purposes." 1 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 2) It is free to make use of the property known as "Qualton Club Ixtapa" located at Carretera Escenica sin numero, Playa Linda, Ixtapa-Zihuatanejo in the manner it sees best fit. 3) Its representative has the sufficient powers to act as its representative, as evidenced in the power granted in public deed number 17648 passed before the faith of Mr. Armando Galvez Perez Aragon, Notary Public Num. 103 of the Federal District and that such power has not been revoked nor amended and that such powers have not been limited. 4) It executed on January 1, 1993 a separate agreement with the LESSEE for the operation of the hotel described in this agreement, in which LESSEE appears as the OPERATOR. The LESSEE declares through its Legal Representative that: 1) It is a Commercial Company legally incorporated pursuant to Mexican law as evidenced by public deed number 106800 dated September 18, 1992, passed before the faith of Mr. Joaquin H. Caceres Ferraez, Notary Public number 21 in the Federal District, the recording of which is pending at the Public Registry of Property and Commerce in Mexico City, Federal District. Additionally, its corporate purpose includes, among others, the following: "Purchase, sale, lease and operation of hotels, motels, restaurants and related services, as well as rendering administration and technical assistance services in the areas described above." 2) Its representative has the sufficient powers to act as its representative, which were granted on September 18, 1992 before the faith of Mr. Joaquin H. Caceres, Notary 2 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. Public Num. 21 of the Federal District and that such powers have not been revoked nor amended and that such powers have not been limited. 3) It executed on January 1, 1993 a separate agreement with the LESSOR for the operation of the hotel described in this agreement, in which it appears as the OPERATOR. BOTH PARTIES declare that: 1) It is their intention to execute this lease agreement and obligate themselves in the terms set forth hereunder, since it is in their best interest, as follows: ARTICLES ONE. Scope of the Agreement. The scope of this agreement is the property known as Qualton Club Ixtapa located at Carretera Escenica sin numero, Playa Linda, Ixtapa-Zihuatanejo described below: Land: TOTAL AREA: 63,690.00 m(2) CROSSING ROAD SECTION, LIMITS AND DIRECTION THAT IT FACES On Calle Prol. Punta Ixtapa and the return roundabout to Punta Ixtapa on the sidewalk facing north. MEASUREMENTS AND ADJACENT PROPERTIES To the North: with a reserved zone owned by FONATUR To the Northeast: with the Prol. Paseo Punta Ixtapa roundabout To the Northwest: with a reserved zone owned by FONATUR 3 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. To the Southeast: with lot Num. 2-C owned by FONATUR To the Southwest: with Federal Land-Maritime Zone. To the West: with a Federal Land-Maritime Zone. TOPOGRAPHY AND CONFIGURATION. Flat HOUSING DENSITY. Hotel type. CONSTRUCTION INTENSITY. *** EASEMENTS AND/OR LIMITATIONS. ***. Property: CURRENT USE. ***. TYPE OF CONSTRUCTION. *** *** *** *** QUALITY AND CLASSIFICATION OF CONSTRUCTION. *** NUMBER OF LEVELS. *** APPROXIMATE AGE OF CONSTRUCTION. *** REMAINING USEFUL LIFE. *** STATE OF PRESERVATION. *** PROJECT QUALITY. *** RENTABLE UNITS OR CAPABLE OF BEING RENTED. *** 4 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. TWO. The LESSOR gives the LESSEE a lease on the property described above. Such lease shall include everything that de facto or by law pertains to the property (both land and buildings edified on such land). As of the date of this agreement and throughout its term and that of its extensions, if any, the LESSEE shall be entitled to the exclusive possession of the property, operating equipment, furniture, machinery, boilers, etc. leased. THREE. Use of the property The property shall be used for commercial purposes as a hotel, including, in addition to the rendering of hotel services, services such as restaurant, bar, discotheque, events (party rooms, banquets, etc.), pool, dressers, tennis courts and gym. FOUR. Rent *** *** *** The rent to be accrued as of the date notification is made as set forth in the preceding paragraph shall be *** per month for the year ***. Such rent shall be paid within the first *** days of each month by LESSEE. LESSOR shall provide LESSEE with receipts of rent payment pursuant to the tax requirements set forth in law. *** The monthly rent shall be paid at LESSOR's domicile within the period set forth in the preceding paragraph. Payment shall be made in U.S. Dollars or in Mexican currency at 5 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. the exchange rate published by the Central Mexican Bank for payment of obligations denominated in foreign currencies. In the event that LESSEE does not timely pay the rent, LESSEE shall pay interest at a rate of ***. LESSEE may not withhold payment of the agreed upon rent unless LESSOR has defaulted in its obligations hereunder and LESSEE were obligated to expend necessary sums so that the property subject matter of this agreement is in compliance with the purpose for which it was leased. FIVE. Term of the agreement The term of this agreement is a compulsory *** period for both parties commencing on the date of execution of this agreement. The term set forth in the preceding paragraph may be extended at the request of either of the parties. In such case, the legal relationship shall be deemed unaltered and shall not be understood as a novation of this agreement. Each and every article contained in this agreement shall prevail during any extension, with the sole exception of the updating of the rent, as agreed in terms of article FOUR. ***. ***. SIX. The LESSEE shall not use the property for any other purposes than those set forth in article TWO of this agreement. 6 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. SEVEN. The LESSOR hereby grants the LESSEE the modifications that are necessary for the fulfillment of the uses for which it is destined, including among such modifications, the expansion of the hotel capacity through the construction of new rooms or facilities. In order to carry out such modifications, the LESSEE shall comply with the regulations in force in environmental and construction matters and shall obtain the applicable permits from the competent authorities. The total investment made for the expansion shall be set-off against rent and shall accrue during the term of this agreement. The rent from rooms added to the hotel once they have been finished and are operational, shall be the same as the rent for the part of the hotel leased in the first instance. EIGHT. All repairs made to the property for its proper maintenance and preservation during the term of this agreement, as well as all modifications to which reference is made in the preceding article shall be borne by the ***. NINE. LESSEE shall return the property, upon termination of this agreement, in the same conditions in which it was delivered by the LESSOR (except for the modifications made to the property with the LESSOR's authorization). TEN. LESSOR commits to delivering the property to LESSEE in good and normal conditions for its use. ELEVEN. LESSOR commits to delivering the property at the time of execution of this agreement with telephone, water, gas and electricity services, as well as the applicable land use permits (license for the use of the federal land-maritime zone). 7 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. The payment of the contributions for water, gas and electricity, as well as for the renewal of the permits or the obtaining of new governmental permits required for providing the property with the use for which it is destined shall be the *** responsibility as of the date of execution of this agreement and until its termination. The payment of property tax and payments for the use of the Federal Land-Maritime Zone shall be borne by the ***. TWELVE. Articles THIRTEEN through TWENTY-SEVEN shall enter into force at the time LESSEE notifies LESSOR in terms of article FOUR of this agreement. THIRTEEN. *** 1) *** 2) *** 3) *** 4) *** 5) *** 6) *** 7) *** 8) *** 8 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 9) *** FOURTEEN. All equipment, including furniture and fittings, plating, dinnerware, stemware and linens and all other equipment required for the operation of the hotel shall be deemed property of the ***. FIFTEEN. REPLACEMENT OF OPERATING EQUIPMENT. *** shall replace the HOTEL operating equipment during the term of this Agreement that *** deems convenient. Such replacements shall be borne by the ***. Such replacements, once installed and concluded, shall become part of the HOTEL. SIXTEEN. IMPROVEMENTS, ALTERATIONS AND/OR ADDITIONS. When improvements, alterations and/or additions are to be made to the property, *** shall carry them out. ***. The total investment made for improvements, alterations and/or additions shall be set-off against rent and shall accrue during the term of this agreement. Such improvements, alterations and/or additions, once installed and concluded, shall become part of the HOTEL. SEVENTEEN. PREVENTIVE MAINTENANCE. *** shall maintain the HOTEL in good operating conditions, notwithstanding reasonable wear and tear and damages caused as a result of fires, riots, disasters, events of force majeure or acts of God or other similar accidents. The expenses incurred by the *** in maintaining and repairing the HOTEL for its proper functioning shall be borne solely by the ***. 9 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. EIGHTEEN. STRUCTURAL CHANGES. If during the term of this agreement, *** sees the need to make structural changes or repairs to the HOTEL for the proper functioning of the HOTEL, or such structural changes are required pursuant to a court order, legal or regulatory requirement in force or coming into force during the term of this Agreement or pursuant to an express order of any competent authority, *** shall implement such changes or repairs with the prior written authorization of the ***. In such an event, the structural changes and repairs shall be borne solely by the ***, whom expressly so accepts the foregoing, and the structural changes and repairs shall be implemented seeking to minimize hindrance to the HOTEL's activities. In the event that the *** refuses to pay for such restructuring expenses, *** shall pay such expenses ***. NINETEEN. PERMITS AND LICENSES. All necessary permits and licenses and those permits and licenses which are required for the operation of the HOTEL, by regulations or administrative provisions, shall be obtained by the *** at its expense and shall be issued in its name. *** commits to maintaining such permits and licenses in force during the term and extensions of this Agreement and shall be responsible for the expenses incurred in connection therewith. TWENTY. COMMITMENTS AND LIABILITIES. The provisions of this Agreement are not intended to constitute an Association or a company between LESSOR and LESSEE. Consequently, the LESSEE's revenues and fees shall not be affected in any manner whatsoever as a result of its hotel activities or operation of the property. 10 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. TWENTY-ONE. PERSONNEL. ***, at the time this article enters into force, shall pay ***, the payroll and related expenses of all employees that intervene in the hotel operation, such as Social Security, INFONAVIT, etc. ***. In this sense, the *** hereby undertakes to grant the *** or the person designated by the *** all general powers necessary in labor matters for the contracting, dismissal, termination, selection, etc. of personnel, as well as powers to appear before any labor authority, whether local or federal or judicial or administrative in nature, or labor unions to defend its interests. *** shall determine the number of employees. It is hereby set forth and exclusively agreed that all personnel renders services exclusively to the *** and are not employed by the ***. *** shall not be liable for such personnel with respect to wages or compensation to such employees, except for the provisions set forth in the applicable labor laws. TWENTY-TWO. INSURANCE. *** shall obtain, at its sole expense, insurance denominated in Dollars of the United States of America covering any risk to which the leased property is exposed, such as fire, lightning, earthquakes and/or tremors and/or volcanic eruptions, hurricanes, hail and/or whirlwinds, heavy seas and/or floods, explosions and acts of vandalism. The value of the insured risk shall be determined by mutual agreement of the parties hereto and shall never be less than the total insurable replacement cost of the leased property damaged. The preferred beneficiary shall be the ***. 11 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. It is expressly agreed that in the event that such an incident were to occur, the *** shall make an investment in no more than *** days from the date of the incident to reconstruct the leased property; in the event the *** defaults on this obligation, the *** shall be entitled to rescind this agreement ***. *** shall maintain at its sole expense, insurance that covers its civil and objective liability vis-a-vis the public, as well as business interruption insurance. TWENTY-THREE. STANDARDS. During the term of this Agreement, the HOTEL shall operate in like form as other similar businesses of the Qualton Hotel Chain, maintaining the same standards of common order maintained in other businesses under its management and ensuring good, efficient service, wholesome food and courteous and kind treatment for its clients. LESSEE may advertise the HOTEL as another hotel operated by the LESSEE's chain and shall use the signs, trade names, and diagrams of its organization regarding the HOTEL administration. LESSOR acknowledges that it has no right whatsoever to the diagrams, insignias, emblems, trade names, trademarks and other similar legally protected property set forth and regulated by the intellectual and industrial property protection laws applicable to the LESSEE, and that are used by the LESSEE in its hotel operations. Furthermore, LESSOR acknowledges that at the termination of this Agreement, LESSOR shall refrain from using the signs and trade names and shall likewise make no statement or declaration that may induce the general public to believing that the HOTEL continues under LESSEE 12 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. management and that the LESSEE continues to be affiliated in any manner whatsoever to LESSOR's system. TWENTY-FOUR. SUCCESSORS AND ASSIGNEES. The parties agree that any change in ownership of the HOTEL shall not affect the LESSEE's rights hereunder and LESSOR expressly agrees that the new owner shall be aware of and shall assume all obligations and responsibilities for which LESSOR is liable hereunder. Upon executing the Trust Agreements, Mortgage Agreements or any other type of liens, the LESSEE's rights as set forth hereunder shall be secured with respect to their survival and continuity. Such rights shall survive regardless of the fact that the LESSOR merges or consolidates itself with another company. Therefore, in such event, the new company shall continue abiding by the terms and conditions of this agreement. In the event that the LESSOR receives any type of offer for the HOTEL, LESSOR shall ensure that such offer includes the acceptance of the terms and conditions hereunder by the future owner. Notwithstanding the foregoing, in the case set forth in the preceding paragraph, the LESSOR shall notify the LESSEE in writing of the purchase offer in case that, pursuant to the provisions of article 2447 of the Civil Code in force in the Federal District, the LESSEE may exercise the preferential right granted in article 2448J of such Civil Code. This right shall be exercised by the LESSEE within 90 days following the date on which written notice is received from the LESSOR. 13 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. If the LESSEE does not exercise its right within the period set forth in this article, LESSOR may transfer the leased property to the third party, without prejudice of the obligations set forth in the first paragraph of this article. TWENTY-FIVE. LIENS. In the event that LESSOR is in need of obtaining a loan or credit facility for financing HOTEL expansions, constructions and/or refurbishments, LESSOR commits to obtaining from the lender its approval of the contents of this Agreement and acknowledgment of such agreement in its terms and conditions. If for any reason such lender were to acquire possession or ownership of the property, such acquisition shall be deemed in acceptance of the terms and conditions set forth hereunder. TWENTY-SIX. PARTICIPATION OF LESSOR IN THE OPERATION. Pursuant to the agreement of the parties, the LESSOR shall not be entitled during the term of this agreement to request that LESSEE acknowledge circumstances, or implement methods or systems that LESSOR deems are convenient for the better operation of the HOTEL, since such matters shall be the sole responsibility of the LESSEE. TWENTY-SEVEN. LESSEE may assign or sublet the leased property to one of its affiliates or subsidiaries. LESSOR hereby grants its express consent as of the date hereof to the foregoing. For the purposes of this article, affiliate or subsidiary shall mean any company in which, due to shareholding position or bylaw provisions or contractual provisions, the LESSEE is entitled to determine the manner in which its administrative bodies are composed or administrative decisions are made by such body. In the event 14 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. that the LESSOR grants its consent for subletting, the LESSEE shall remain liable to the LESSOR as if the LESSEE continued using and enjoying the leased property; therefore, LESSEE agrees to not execute sublease agreements for a period exceeding the term of this agreement and to deliver to LESSOR, at the termination thereof, the leased property free of any occupants and free of any liability towards its sublessee(s). Concessions that by the very nature of the business need be granted to third parties for providing additional services to guests are expressly excluded from the foregoing. TWENTY-EIGHT. ***. *** 1) *** 2) *** 3) *** TWENTY-NINE. *** *** THIRTY. Jurisdiction and Authority of the Courts The interpretation and fulfillment of this agreement shall be governed, as agreed by the parties, by the laws in force in the Federal District at the time of execution of this agreement and by the courts sitting in the Federal District. The parties hereby waive any 15 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. forum that may be available to them by reason of their current or future domiciles or otherwise. For the purposes of this agreement, the parties designate the following as their domiciles: LESSOR LESSEE Carretera Escenica s/n Monterrey No. 150, Colonia Roma. C.P. Playa Linda 06700. Mexico, D.F. Ixtapa-Zihuatanejo The parties declare that there is no error, fraud, bad faith or any other vice of consent or violence at the time of execution of this agreement and that once this agreement was read, they sign it on January 11, 1993. /s/ Bernardo Dominguez Cereceres /s/ Jorge Lopez Nunez -------------------------------- --------------------------------------- LESSOR LESSEE 16 THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH A *** AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.